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Product Life Cycle Management by Gerrit Muller University of Southeast Norway-NISE e-mail: [email protected] www.gaudisite.nl Abstract Product Life Cycle Management addresses the full life cycles of products, from conception until disposal. The creation of the product determines largely what can be done with the product in the later life cycle phases. From business perspective the installed base, all systems that are operational in the field, is an asset that provides many opportunities. From technical perspective the operational life of products is quite a challenge, because systems keep evolving to fit in the market and to benefit from technical capabilities. This creates a variety of operational configurations that have to be served. Distribution This article or presentation is written as part of the Gaudí project. The Gaudí project philosophy is to improve by obtaining frequent feedback. Frequent feedback is pursued by an open creation process. This document is published as intermediate or nearly mature version to get feedback. Further distribution is allowed as long as the document remains complete and unchanged. June 5, 2018 status: preliminary draft version: 0.2 R1 SW R1 HW R1 HW R2 SW R2 SW R2 HW R3 SW R3 HW initial delivery sw upgrade initial delivery sw upgrade R3 SW R2 HW initial delivery R3 SW R3 HW forklift upgrade How long are new functions compatible with older system configurations? When to break compatibility? When does the customer pay for an upgrade? When to retrofit? example Try to run Windows Vista on your 1GB computer from 2005...

Product Life Cycle Management - Gaudí … Life Cycle Management by Gerrit Muller Buskerud University College e-mail: [email protected] Abstract Product Life Cycle Management

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  • Product Life Cycle Managementby Gerrit Muller University of Southeast Norway-NISE

    e-mail: [email protected]

    Abstract

    Product Life Cycle Management addresses the full life cycles of products, fromconception until disposal. The creation of the product determines largely what canbe done with the product in the later life cycle phases. From business perspectivethe installed base, all systems that are operational in the field, is an asset thatprovides many opportunities. From technical perspective the operational life ofproducts is quite a challenge, because systems keep evolving to fit in the marketand to benefit from technical capabilities. This creates a variety of operationalconfigurations that have to be served.

    Distribution

    This article or presentation is written as part of the Gaud project. The Gaud projectphilosophy is to improve by obtaining frequent feedback. Frequent feedback is pursued by anopen creation process. This document is published as intermediate or nearly mature versionto get feedback. Further distribution is allowed as long as the document remains completeand unchanged.

    June 5, 2018status: preliminarydraftversion: 0.2

    R1 SW

    R1 HWR1 HW

    R2 SW

    R2 SW

    R2 HW

    R3 SW

    R3 HW

    initialdelivery

    swupgrade

    initialdelivery

    swupgrade

    R3 SW

    R2 HW

    initialdelivery

    R3 SW

    R3 HW

    forkliftupgrade

    How long are new functionscompatible with oldersystem configurations?

    When to break compatibility?

    When does the customer payfor an upgrade?When to retrofit?example

    Try to run Windows Vistaon your 1GB computer from2005...

  • Figure Of ContentsTM

    introductionfrom conception to disposal

    product life cycle managementprocess

    businessthe money dimension

    heart beat of changesthe time dimension

    complexityhuge number of configurations

    conclusion

    Product Life Cycle Management2 Gerrit Muller

    version: 0.2June 5, 2018

    PLMlogo

  • Introduction: Basic System Life Cycle

    introductionfrom conception to disposal

    creation production operation disposalconception

    product life cycle managementprocess

    businessthe money dimension

    heart beat of changesthe time dimension

    complexityhuge number of configurations

    conclusion

    Product Life Cycle Management3 Gerrit Muller

    version: 0.2June 5, 2018

    PLMlogoIntroduction

  • System Life Cycle after Creation

    system

    order

    using

    local

    changes, e.g.accounts

    procedures

    ma

    inte

    na

    nce

    up

    gra

    de

    using

    orde

    ring

    com

    pone

    nts

    man

    ufac

    turin

    g

    shipping

    installatio

    n

    shipping

    installatio

    n

    refu

    rbishing

    shipping

    secondary

    use dis

    po

    se

    ma

    inte

    na

    ncead

    d o

    ptio

    n

    sales

    Product Life Cycle Management4 Gerrit Muller

    version: 0.2June 5, 2018

    MALCsystemLifeCycle

  • Volume of Installed Base versus New deliveries

    2008

    2005

    2000

    1995

    installed base

    decommisioned

    initial deliveries

    legend

    installed base10..20 times

    initial deliveries

    this is an entirely fictitious case

    Product Life Cycle Management5 Gerrit Muller

    version: 0.2June 5, 2018PLMvolume

  • Case: X-ray Catherization System

    Product Life Cycle Management6 Gerrit Muller

    version: 0.2June 5, 2018

    PLMxraySystemPhoto

  • Product Related Life Cycles

    system

    creation

    system

    productionsystem

    sales

    service

    individual systems

    disposalupgrades and options

    productionupgrades and options

    sales

    upgrades and options

    creation

    Product Life Cycle Management7 Gerrit Muller

    version: 0.2June 5, 2018

    MALCproductLifeCycle

  • introductionfrom conception to disposal

    product life cycle managementprocess

    businessthe money dimension

    heart beat of changesthe time dimension

    complexityhuge number of configurations

    conclusion

    Product Life Cycle Management8 Gerrit Muller

    version: 0.2June 5, 2018

    PLMlogoProcess

  • Simplified process view

    strategyprocess

    customer

    supplying business

    value

    product creationprocess

    customer oriented (sales,service, production) process

    people, process and technologymanagement process

    Product Life Cycle Management9 Gerrit Muller

    version: 0.2June 5, 2018

    RSPprocessDecomposition

  • Positioning PLM

    strategyprocess

    customer

    supplying business

    valu

    e

    product creationprocess

    customer oriented (sales,service, production) process

    people, process and technologymanagement process

    Product Life

    Cycle Mana

    gement

    Product Life Cycle Management10 Gerrit Muller

    version: 0.2June 5, 2018

    PLMprocessPositioning

  • introductionfrom conception to disposal

    product life cycle managementprocess

    businessthe money dimension

    heart beat of changesthe time dimension

    complexityhuge number of configurations

    conclusion

    Product Life Cycle Management11 Gerrit Muller

    version: 0.2June 5, 2018

    PLMlogoBusiness

  • Product Margin = Sales Price - Cost

    material

    labour

    miscellaneous

    margin

    cost

    pri

    ce

    sale

    s p

    rice

    Cost per product,

    excluding fixed costs

    Margin per product.

    The margin over the sales volume,

    must cover the fixed costs, and generate profittransportation, insurance,

    royalties per product, ...

    purchase price of components may cover

    development cost of supplier

    retailer margin

    and costs

    stre

    et p

    rice

    Product Life Cycle Management12 Gerrit Muller

    version: 0.2June 5, 2018

    SFCmargin

  • Profit as function of sales volume

    sales volumein units

    $

    incom

    e

    expenses

    break even

    point

    profit

    expected

    sales volume

    fixe

    d c

    ost

    s

    variable

    Product Life Cycle Management13 Gerrit Muller

    version: 0.2June 5, 2018

    SFCprofitAndSalesVolume

  • Investments, more than R&D

    research and development

    NRE: outsourcing, royalties

    marketing, sales

    training sales&service

    financing

    including:

    staff, training, tools, housing

    materials, prototypes

    overhead

    certification

    strategic choice:

    NRE or per product

    business dependent:

    pharmaceutics industry

    sales cost >> R&D cost

    often a standard staffing rate is used

    that covers most costs above:

    R&D investment = Effort * rate

    Product Life Cycle Management14 Gerrit Muller

    version: 0.2June 5, 2018

    SFCinvestments

  • Income, more than product sales only

    products

    options,

    accessories

    other recurring

    income

    services

    sales priceoption * volumeoption

    sales priceproduct * volume product

    incomeservice

    options

    services

    content, portal

    updates

    maintenance

    license fees

    pay per movie

    Product Life Cycle Management15 Gerrit Muller

    version: 0.2June 5, 2018SFCincome

  • introductionfrom conception to disposal

    product life cycle managementprocess

    businessthe money dimension

    heart beat of changesthe time dimension

    complexityhuge number of configurations

    conclusion

    Product Life Cycle Management16 Gerrit Muller

    version: 0.2June 5, 2018

    PLMlogoTime

  • Example: Evolution of X-ray Systems

    1980 1985 1990 1995 2000 2005

    catherization lab

    kVmA

    interfaces

    catherization lab

    kVmA monitorin

    g

    ultrasound

    tippositionin

    g

    PC'sCardiologyRadiology

    HospitalInformation System

    PACS

    MR scanner

    CTscanner

    kVmA

    electro-mechanicalcomponents

    autonomoussubsystems

    synergycardio/vascular

    kVmA

    vascular

    kVmA

    system control

    system of systems

    Product Life Cycle Management17 Gerrit Muller

    version: 0.2June 5, 2018

    FAIxrayTimeline

  • Creation Chain

    aligned

    strategy, processes,

    tools, repository

    independent

    strategy, processes,

    tools, repository

    shared

    strategy, processes,

    tools, repository

    product

    creator &

    integrator

    component

    creator

    component

    creator

    off the shelf

    component

    supplier

    component

    creatorpartner

    product

    competitor

    complementor

    in house

    customer

    privileged

    customer

    direct

    customer

    customer

    via reseller

    Product Life Cycle Management18 Gerrit Muller

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    PEVOCcreationChain

  • Example: X-ray Catherization System

    catherization lab

    kVmA

    monitoring

    ultrasound

    tippositioning

    PC'sCardiologyRadiology

    HospitalInformation System

    PACS

    MR scanner

    CT scanner

    X-ray catherization environment anno 2005

    fast changingPC technology

    partners

    slow changingXray and

    mechanicaltechnology

    medium changingelectronics

    slow changinginfrastructure

    Product Life Cycle Management19 Gerrit Muller

    version: 0.2June 5, 2018

    PLMxraySystem

  • Example of Time Scale Model for Changes

    1 year

    commodity

    hardware

    and

    software

    new generation of

    magnets

    gradients

    detectors

    major SW

    release

    minor SW

    release

    workstation

    useful life

    MR

    scanner

    useful life

    10 years

    procedural

    change

    legislation

    change

    clinical

    prototype

    problem

    response

    3 months

    Product Life Cycle Management20 Gerrit Muller

    version: 0.2June 5, 2018

    HMPAlifecycles

  • introductionfrom conception to disposal

    product life cycle managementprocess

    businessthe money dimension

    heart beat of changesthe time dimension

    complexityhuge number of configurations

    conclusion

    Product Life Cycle Management21 Gerrit Muller

    version: 0.2June 5, 2018

    PLMlogoVariation

  • Product Configurations Evolve Continuously

    D

    A B C

    F G H

    D

    A B

    F G

    product 1

    product 2

    J

    I

    D

    A' B C

    F' G' H

    K

    L

    D

    B

    J

    I

    F' G'

    A' K

    L

    product 1'

    product 2'

    R1, 1995 R2, 1996

    A' B C

    F'' G''

    K

    L'

    D'

    M

    A' B I

    F'' G''

    K

    L'

    D'

    J'

    R3, 1997

    et cetera

    Product Life Cycle Management22 Gerrit Muller

    version: 0.2June 5, 2018

    PLMevolutionConfigurations

  • Regression of Configuration

    A' B C

    F'' G''

    K

    L'

    D'

    M

    initial deliveryR3, 1997

    mandatory changesrecommended changes

    upgradesoptionsrepairs

    good servicepoor service

    time pressurepragmaticsavailability

    ? ? ?

    ? ?

    ?

    ?

    D'.?

    ?

    Product Life Cycle Management23 Gerrit Muller

    version: 0.2June 5, 2018

    PLMregressionConfiguration

  • Compatibility and Upgrading

    R1 SW

    R1 HWR1 HW

    R2 SW

    R2 SW

    R2 HW

    R3 SW

    R3 HW

    initialdelivery

    swupgrade

    initialdelivery

    swupgrade

    R3 SW

    R2 HW

    initialdelivery

    R3 SW

    R3 HW

    forkliftupgrade

    How long are new functionscompatible with oldersystem configurations?

    When to break compatibility?

    When does the customer payfor an upgrade?When to retrofit?example

    Try to run Windows Vistaon your 1GB computer from2005...

    Product Life Cycle Management24 Gerrit Muller

    version: 0.2June 5, 2018

    PLMupgradingCompatibility

  • introductionfrom conception to disposal

    product life cycle managementprocess

    businessthe money dimension

    heart beat of changesthe time dimension

    complexityhuge number of configurations

    conclusion

    Product Life Cycle Management25 Gerrit Muller

    version: 0.2June 5, 2018

    PLMlogoConclusion

  • Systems Engineering and PLM

    systemcreation

    systemproduction

    systemsales

    service

    individual systems

    disposalupgrades and options

    productionupgrades and options

    sales

    upgrades and optionscreation

    future needs

    Systems Engineering: anticipation of future needswhen creating new systems and features

    Product Life Cycle Management26 Gerrit Muller

    version: 0.2June 5, 2018

    PLMsystemsEngineering

  • Basic System Life Cycle

    creation production operation disposalconception

    Product Life Cycle Management27 Gerrit Muller

    version: 0.2June 5, 2018

    PLMbasicLifeCycle