PLM and its role in harmonizing acquired businesses

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PLM and its role in harmonizing acquired businesses

Dynamics of the business landscape is one of the biggest PLM implementation dilemmas. Business structures keep changing and evolving. Companies acquire other companies and integrate the acquired businesses to the corporation on an operational level. This is also everyday life in relation to PLM implementations.

Full integration of an acquired business from the PLM perspective means harmonizing the PLM related processes and tool and especially harmonizing product definition content i.e. 3D models, drawings, item bases on a detailed level.

In most cases this leads to laborious transformation of existing legacy product data to the “standard” corporate PLM set up. It means ramping down existing IT-systems as well as enriching, cleansing, and converting existing product data to new formats. It also means changes in processes, practices, and ways of working for many individuals in the acquired organizations.

PLM implementation in quickly evolving company landscape is art of its own. The company acquiring other companies must have a very clear vision, how new shared PLM should evolve in this new set-up. Is the target full harmonization or just integration of as-is legacy to the standard corporate set-up or something in between? Which acquired legacy systems will be ramped down and replaced by new ones, which systems will be integrated to the corporate PLM core?

If the decision is to integrate as-is set-up of the acquired business to corporate set-up, a thorough understanding how legacy system integrations will affect the master data set-up and the everyday practices of the organizational units working with both legacy and shared corporate product data is a must. This approach may seem appealing from schedule perspective and due to low requirement for information transformations. However, it will make product data management very complex and cause a lot of issues down the road.

If the full harmonization approach is used, a very clear and precise PLM concept is a must. This concept must act as a template of the product information / data conversion work as well as definition of targeted tool and process set up for the acquired business.

In many cases a full PLM harmonization will take several years. The schedule and magnitude of the projects is very much depended on the business model in use, information content (# of drawings and items) and the complexity of products and processes. It is fair to say that in project-based business (ETO) and standard business this transformation is relatively straightforward, but in configure to order business (CTO) due to product complexity it is in many cases very demanding. However, a full harmonization enables usually huge savings in relation to sourcing, BOM cost, manufacturing efficiency and the cost of IT.