We’re just getting started here at Vuuch and one of the things we’re doing is thinking hard — very hard — about the manufacturing software market. What’s the size? How much do people spend on the categoy? How much value has it really delivered?
The answer to that last question is a shocker…and the data giving us indigestion is from an unimpeachable source. Consider the chart below which I created from Bureau of Economic Analysis data (ftp://ftp.bls.gov/pub/special.requests/opt/lpr/mfgbardata.txt) which shows the annual percentage productivity change in the US manufacturing sector from 1987 through 2009. (Click on the chart to display it full size)
Bottom line: we’re spending more and getting less. Sure, there was a golden age of productivity improvement in the 90′s — when modern CAD systems became prevalent. And, one could argue, there was even a second wave in the early 2000s that was the result of a wave of PLM implementations.
But in the last few years, productivity increases have fallen below the rate of the late 1980s. Yet, CIMdata estimated that PLM spending (including CAD) in 2009 was about US$25B, despite the economic crisis — and up from just $14B in 2004, when one could argue were in the “middle” of the PLM golden age.
Yes, my friends, this is good money thrown after bad. It’s a waste. It’s dumb. And who among us wants to make a bet that Dassault Systemes, Autodesk, PTC, Oracle and PTC are going to tell their price-sensitive, recession-wracked customers that release 432 of their PLM system won’t make a real difference? That more PLM, more CAD just ain’t gonna help shock the patient’s heart back into rhythm?
Chris and I have a theory: CAD and PLM never really changed the way people work together. Those technologies simply automated aspects of the product development and manufacturing process that needed automation. But once that was achieved — and productivity was boosted for a time — re-automating the same processes over and over again yields no substantive benefit. That’s what the BEA’s numbers clearly say. Once you have CAD and PLM — and have achieved the productivity they bring to things you were previously doing manually — updating them doesn’t get you more productivity. Why? Simply because CAD and PLM do what they do — and they are ill-suited to solve additional problems.
So, CAD and PLM vendors can leverage lock-in and claim incremental capabilities and it won’t make a difference in the industry’s ultimate productivity. That’s because the green field in manufacturing doesn’t lie in “extending” CAD and PLM with (largely useless) features — it lies in including CAD and PLM in tech that is focused on the entire team’s work and the team’s relationships to that work.
Vuuch believes the next frontier that can move the needle in the BEA’s analysis will require what we call an “enterprise social system.” An ESS is tech that has CAD and PLM “DNA” — that is, it completely understands manufacturing — but an ESS doesn’t “extend” CAD and PLM to new users. Instead, it links all kinds of users in the enterprise, in the ways they want to work together and, most importantly, through the things they want to work on.
If we want to stop just breaking rocks, we have to stop believing that the tech we already have is the tech that we need to improve manufacturing productivity.
Hello
You say “[CAD and PLM] technologies simply automated aspects of the product development and manufacturing process that needed automation. But once that was achieved,…”.
Do you know lots of companies having finished implementing a PLM application covering all aspects of Product development, including new ones like for example regulation using Reach? PLM is a never ending story, which is not in favor of implementing it.
Hello, François.
Our issue is PRECISELY that “PLM is a never-ending story.” PLM has, in fact, been good for product development. No question there.
But the initial wave of PLM-delivered productivity is long over…and PLM vendors are into their “Baroque period” — gilding the lily, adding more features that offer only very slight improvements but which require huge disruptions and cost to implement.
Worse, PLM has not expanded its user base. That’s not for lack of trying, but because PLM is just to hard for non-engineering users to use.
All of those problems are what we at Vuuch are attacking in our ESS. Thinking “beyond PLM” is the way that inventive product development teams will be able to outpace their competition.
[...] and lowered costs. They have been sated with manufacturing technology. They know that while PLM systems have been useful — and will continue to be so — adding “features” to make PLM [...]