PLM, the Resource Revolution and you (yes, you)

I gave a talk last week over at PI Live, Market Key’s online platform for all things PLM. When the Market Key team and I were brainstorming the topic for that session, they asked me to focus on something a bit “bigger picture” than implementation stories or best practices — those are important but they have a lot of other content on that already. I had some time to think over the year-end break and decided to look in more detail at research I find fascinating but that hasn’t really been applied to our PLMish world yet. Head over to PI Live to listen to the recording (details soon), download the presentation by clicking on the image above or read on for some highlights. Economists, public policy types and others say we’re in a third industrial revolution right now. The first industrial revolution was in the late 1700s to mid 1800s,  when millions of workers left farms to find work in factories made possible by mechanization and the steam engine. The second industrial revolution ran from the late 1800s into the early 1900s, with the development of electricity, cars, railroads and the modern banking system. Each industrial revolution spawns what some call a Resource Revolution: Economic growth improves the standard of living, which drives demand as more people want the hot-ticket items of their time; today, that’s probably middle-class city living and the cars, cell phones and other goods that implies. But those goods are still manufactured the way they always have been, which leads to resource scarcity and sends prices up. We still build buildings out of steel, use rare earth elements in electronics and need oil to power electricity generation plants — all of which are in huge demand in both emerging and more established economies. That leads to innovation as business try to make more efficient use of existing resources or change products to consume resources that aren’t as scarce or invent replacement materials. Changing those products and processes creates new businesses –or at least new business models– to deploy these new methods at scale. That resets the bar and, in turn, leads to a new cycle of economic growth that starts the chain all over again. The good news: Every single time, economists say, humans have figured out a way around or through that scarcity to create new ways of doing things. And this is where PLM comes in. We need to know what we’re using, where, in what quantitiy and how. To deal with scarcity, we can

• make better use of the resources we do have available to us by wasting less. This ties into everything we do: more efficient manufacturing processes that waste less material and need less electricity; less product packaging; not so much over-design…
• substitute with something more efficient. Lightweighting, perhaps with generative design, replace heavy structures with composite materials or aluminum to cut fuel consumption in automotive and aerospace ….
• optimize both production processes and the products themselves, perhaps by using sensors or controls to improve efficiency. IoT, anyone?

There are lots of other possibilities like virtualization – designing a product to be sold online rather than via a physical store — that factor into designing product offering. But to do any of this, we need information about what our products and production processes use and, often, that’s locked into a PLM. Not to dissuade you from tuning into the whole presentation, but the bottom line: Over and over again, as economists prove, we’ve seen industrial revolutions shake up things as they are. The first industrial revolution moved people into urban manufacturing centers and gave us the great textile, shipping, and railroad companies of the nineteenth century, many of which have since vanished. The second industrial revolution saw the rise of General Electric, Ford and General Motors – which still continue but have reinvented themselves to meet new realities. We’re now in a third industrial revolution where upheavals happen quickly and often. Think Uber and taxis, Airbnb and traditional hotel chains, cell phones and landlines. Companies that learn how to respond to these threats will survive, and those that don’t –or can’t—may not. Don’t let someone more agile leap into your space to steal your customers and supply channels because you’re not looking at your resource usage. Technologies like 3D printing allow tiny startups to manufacture close to their customers, personalizing in ways larger more capitally-intensive companies perhaps can’t right now. Connectivity and collaboration technologies let small teams band together to appear much bigger and create reach that used to be selling point for global companies. How are you using your people, electricity, minerals, hydrocarbon derivatives and all of the other resources that go into your products? What happens to any of those inputs in case of a conflict or some other supply interruption? I have a couple of examples in the presentation of how companies are thinking about their resource usage and urge you to look into this, too. It sounds scary, and it is in a way. BUT: you gained your competitive advantage because you were smart about what your customers wanted and how to give it to them. You’re still smart — just don’t rest on past accomplishments.