An Epic Challenge: Andreas Renschler, former Daimler AG executive, has the tough job of harmonizing PLM at Volkswagen’s three truck units.
There’s an ongoing battle over which PLM/PDM system Volkswagen Group will use as the backbone for its truck manufacturers. After last year’s tug of war over Scania, Volkswagen fully owns three truck brands: MAN, Scania and Volkswagen Trucks. This makes the company a powerhouse in the truck business with an offering that includes light and heavy trucks and specialty vehicles.
It’s a strong hand and Volkswagen's chairman, Ferdinand Piëch, has high expectations for the alliance. Overall, VW predicts savings of approximately €850 million over the next 10 to 15 years. This will in part be based on joint purchasing projects and sharing of standardized components. It will also come down to synchronized product development processes and PLM-technologies.
But combining these truck brand’s diverse approaches under one umbrella, both commercially and technologically, has proven to be a tall order. Former Daimler AG executive Andreas Renschler has been tasked with this challenge. Renschler was appointed in the beginning of last year, but only started in February due to his contract with Daimler.
Meanwhile, Piëch and the board have struggled to forge closer ties between Scania and MAN. They have also struggled to increase cooperation within the commercial-vehicles business – a matter that is easier said than done. One of the issues is that each of the three brands use different PDM/PLM-systems and it seems hard to find one single solution. The matter is very delicate and the people who dare to speak up will face an environment where traditions, emotions, prestige and politics often mean more than technology.
Here’s the current scenario:
• MAN has recently started to implement PTCs PDM Link and is designing with Dassault’s CATIA V5 and to some extent PTC´s ProEngineer/Creo.
• Scania tried PTC last year, but decided to remain on Dassault Systemes’ ENOVIA for PDM (still with DS CATIA V5 for CAD).
•Volkswagen, on the other hand, is a Siemens PLM customer, with Teamcenter as a PDM backbone and CATIA for CAD design.
The connection between PLM and Scania’s business model
One of the most critical issues is the difference between MAN and Scania in terms of business models. Scania is one of the world's most profitable truck manufacturers in the 16-plus tons class. It’s far from being the biggest, but it has margins like no other company. Its trucks are of high quality and produced under a lean, modular production system inspired by Toyota.
Volkswagen owned Scania is known for its tailor-made vehicles and modularized production methods.
The secret to Scania's success is a sales model where product development and modular manufacturing processes are interwoven with sales into a holistic system. The company is known for its tailor-made vehicles. Scania’s PLM plays a big role in its business model. The system features a custom-made database and configurator called OAS, with ENOVIA playing a minor part (a CAD vault).
“We work with mass customization of modular products,” explains Albina Ulvegren, Scania’s head of strategy and process maintenance PDM & CAD. “The variations in how a truck is configured is almost unlimited; everything is customized and on average we only build 1.2 trucks that have the same configuration. Our challenge now is to make it clear that our OAS/PDM-system and business model are closely interrelated parts of Scania’s DNA. Thus you can not change one without changing the other.”
Such a change would put Scania's successful business model at risk. In this article we’re going to take a closer look at the reasons for that.
The world’s No. 2 automotive manufacturer
Volkswagen has become the world's second largest automotive manufacturer (and is aiming for the top). It has achieved this by cutting costs and implementing standardized parts and technologies across its brands; the main ones being VW, Audi, Seat, Skoda and Porsche. So what would be more natural than to apply this strategy to its commercial-vehicle operations? A lot, it turns out. The issue at hand is about Scania’s complexity versus MAN’s more standardized model structure, a structure that does not demand the same level of advanced IT support.
MAN’s PLM configuration
MAN trucks are doing well in the market, but the products are generally less complex than Scania’s. Therefore, the German truck manufacturer has not required systems for individual mass customization and advanced configuration. Instead, the company has focused on standard truck models that are strong in the tractor-trailer segment. This means the company requires a less advanced support system.
On the CAD side, MAN uses both Dassault's CATIA V5 and PTC's ProEngineer/CREO. After a succesful pilot last year that considered product development (ie, not production), the company chose PTC’s PDMLink (part of Windchill) for their CAD vault and PDM system. Configuration and structural control is principally handled via an Excel Integration with PDM Link. The eBOM (engineering BOM) and the mBOM (manufacturing BOM) are produced by PDM Link via the Excel integration, picking up the parts from the CAD vault. The implementation of PDM Link is under way but at a low speed in anticipation of a final PLM decision.
A Scania truck 3D model designed in DS CATIA V5.
Scania’s different approach to PLM
Scania has developed a reputation for delivering individualized trucks. These products are configured for a range of different needs, depending on the circumstances of the individual customer/user.
On the CAD side, Scania uses Dassault's (DS) CATIA V5 while ENOVIA V5 serves as the CAD vault. PDM functionality is handled via Scania's proprietary OAS platform which defines the rules for how the components can be assembled. The OAS works as a product database, configuration and structural control solution. CAD geometries are downloaded from the ENOVIA CAD vault in accordance with the configurations delivered by OAS.
In terms of the eBOM and the mBOM, it’s once again about OAS and its couplings to ENOVIA. The company's manufacturing solutions can’t handle many variations; you have to prepare one at a time and make them individually for each truck.
The link between sales and manufacturing
Scania’s business model and the PLM system's structure are closely linked to offer each buyer a customized truck. For example, a truck designed for long-distance transport on highways has completely different needs than one used for short-distance transport of heavy products via gravel roads.
In the first case, the emphasis is on comfortable operating environments, sleeping quarters and energy efficiency. The latter features are lower priority for short shipments of, for instance, heavy and dirty mass materials. Here, engine power and payload are important factors. Additionally, the wear and tear suffered in off-road environments increases the need for maintenance and service.
The complexity of this approach is striking; we are not talking about a product that can be sold over the counter. Instead, an in-depth meeting with the client is required. You might need to figure out how the truck usage looks, among other things, based on data collected from the customer’s previous truck. The answers and the data are gathered in a ”user profile,” which is the basis for the optimized truck solution.
The benefits of mass customization
From an overall perspective, it’s clear that the operations overpower IT support at Scania, not vice versa. Basically, there is an integrated model that everyone in the company is familiar with. This model is built around the life cycle of governance, based on three core values: PRINCIPLES, METHODS and RESULTS. The core values are the foundation of the PRINCIPLES (a way of thinking), which are supporting the METHODS (a way of doing) to achieve RESULTS. Other core values are Customer first, Respect for the individual and quality (elimination of waste).
One example of the principle’s above is life cycle thinking, which takes a holistic approach to evaluating products. In Scania’s case, that would include product development, manufacturing, distribution, service and maintenance. Given this, Scania’s view of sales is that the cost of a truck is not to be judged by the intitial price, but over the whole life cycle.
”The OAS solution offers Scania the flexibility and control it needs”, says Scania’s Albina Ulvegren.
Here are some important benefits according to Ulvegren:
• A higher price profile.
• Customers who frequently come back.
• Modularization allows for customized trucks.
• Modularization has created a more efficient use of standardized parts. All the pieces fit together.
Why Windchill didn’t work at Scania
The business model, the mass customization and Scania's long-run modularization makes it difficult to use a regular PLM system. And the solution that Scania built, the OAS, addresses this challenge in many ways.
The proprietary OAS solution contains the product database as well as solutions for configuration, structural and change management. Dassault’s PLM/PDM solution, ENOVIA, is one of the pillars in this, serving as the CAD vault.
Ulvegren says that ENOVIA is a good solution and works for some of Scania’s needs. But to make the product descriptions that the business model requires, the company would have needed to rebuild the architecture which is a complex and expensive operation. The OAS solution offers Scania the flexibility and control it needs.
It’s clear that Volkswagen executives want their truck manufacturers to share a common solution, but so far it’s not clear which one. It could be PTC's Windchill, but no decision has been made primarily due to the differences between MAN and Scania’s business models. What has worked at MAN (Windchill PDM Link) has not worked at Scania. The company did run a Windchill pilot last year, which, unfortunately had difficulty living up to the required demands.
”Windchill PDMLink’s architecture does not fit to manage Scania’s dynamic generic product structure between OAS and targeted applications. Nor does it meet the target for Scania to have one single vPDM integration platform supporting iterative cross-functional virtual product development (CAD, CAE, DM etc)”, says Albina Ulvegren.
What has worked at MAN has not worked at Scania. Above Scania’s 580 model designed in CATIA.
Is Siemens’ Teamcenter an option?
Overall, the PLM decision appears to rest on Scania’s complex model range against MAN’s lower complexity offerings. This raises a couple of questions: is it even possible to assemble these pieces into one system? Should Scania aim towards becoming a mass producer with fewer options for customers? Should MAN continue its strategy? And what about Volkswagen's light truck product realization model; can its PLM solution based on Siemens’ Teamcenter be used for the two heavy truck manufactuers?
These are some of the critical questions that Renschler has to struggle with. A singular system has yet to be implemented, which is a consequence of failing to make a general system decision. Process collaboration basically requires the same system and simplifies component interaction. It has already started to happen; for example, Scania is expected to manufacture gearboxes for MAN.
Siemens Teamcenter – the dark horse
There is, however, a dark horse in the mix. Volkswagen has worked with Siemens' Teamcenter for a long time. Siemens has also in recent years developed several ambitious solutions on the BOM and configuration side that have the potential to live up to the advanced configuration principles of truck production.
According to our sources, the Volkswagen leadership is tired of MAN and Scania’s lack of collaboration in regards to PLM. The new head of VAG’s commercial vehicles roster, Andreas Renschler, is an expert in the truck trade who helped make Daimler Mercedes a truck-industry leader. He was part of the group that made the decision to move from Dassault's CATIA to Siemens NX and Teamcenter.
Renschler may very well be the one who implements the sharing of components to a greater extent, while also initiating a synchronization process on the PLM side. In addition to smoother production and a potential solution to the common BOM problem, there are 850 million other good reasons (the calculated ”merger” savings in euros) to get into a partially common platform. The main issue is how this could work without tearing Scania’s excellent business model apart?
The new head of VAG’s commercial vehicles roster, Andreas Renschler, is an expert in the truck trade who helped make Daimler Mercedes a truck-industry leader.
BOM management is crucial
Bottom line: my guess is that the BOM management issues will be the most crucial and will determine the direction the company takes. Regardless of what VAG decides to do, the gains that can be made through sharp, highly automated BOM creation and MDM (Master Data Management) solutions is significant. The advanatge of an MDM solution is that it connects the PLM, MES and ERP systems into seamlessly functioning IT units for the shop floor and manufacturing.
Gartner PLM analyst Marc Halpern, for one, claims that MDM is a weak link when it comes to product realization processes – at least in large-scale industries. Yet there are gains to be made, especially when it comes to things like BOM management. Working with spreadsheet solutions is by no means ideal and he adds that "managing BOMs with high level MDM solutions has the most impact on life cycle performance". It affects almost everything from cost, quality and sourcing, to tooling, factory layout, customer options, and service efficiency.
PTC’s advantage is that its Windchill PDMLink is already in use at MAN.
PTC, Dassault or Siemens – who will win the race at VAG?
Who will be the best provider of such a system in the context of Volkswagen Group? The advantage to PTC's Windchill PDMLink is that it’s already used by MAN and employees seem happy with it. However, the main drawbacks are Scania’s decision to remain with Dassaults’ ENOVIA after the Windchill pilot and that PTC’s production-related solutions still have some development work ahead of them. That being said, PTC’s partnership with GE was a step in the right direction.
Dassault System’s ENOVIA is utilized in Scania, but the fact that it is used mostly as a CAD vault indicates that it is replaceable. Meanwhile, Siemens’ Teamcenter is used by Volkswagen. It seems to be working fine and has not yet been an option at MAN or at Scania.
When it comes to commercial PLM systems, Siemens is at the forefront of MDM solutions with its strong presence in product development and shop floor IT. The company’s deep commitment to the Industry 4.0 concept (a framework for developing the access points that are required for a seamless solution) is definitely an advantage in the German industry. But what might be even more useful is Siemens’ efforts to develop sharp BOM solutions in Teamcenter (TC).
Add to this TC’s multi-CAD capabilities, which makes it possible to manage both Pro/ENGINEER/CREO and CATIA files. Additionally, flexible BOM management is a key feature. TC can do this for both MAN and Scania. In other words, if you can manage Scania, you can manage MAN. Finally, TC could address the Check-in/Check-out problem by offering component-based check-in/check-out. Therefore, you don’t need to lock the large structures when you only change one thing. For example, let's take something as simple as a screw size. TC can lock individual parts while you keep on working on the remaining ones.
The most basic question all truck manufacturers ask is: "Can I use most of my available processes, resources and articles to manufacture this truck?"
The answers depends on how the PLM configuration looks. Generally, the problem for an industry with a high level of variability is to be able to verify, in advance, if the suggested variant is buildable and to what cost. For instance, can existing factories, processes, parts, resources, lines etc be reused for this variant (and to what extent)? Or does it require major (and costly) rework. In other words, ”will the variant be profitable or will we lose money?” When it comes to this question, Scania has come a long way while MAN, who don't have the same level of variability as Scania, is working in a different way and doesn't have the problem to the same extent. The latter also goes for Volkswagen, which generally does not manufacture customized vehicles at the same level as Scania.
Does Siemens’ PLM hold an advantage? Perhaps.