What Could Process Manufacturers Do Better in PLM?

Part 1 of my recent blog series, Filling the Holes and Breaking Down Artificial Walls in a Process PLM Solution Set, established that the product lifecycle management (PLM) software market for process industries (i.e., food & beverage, life sciences, chemicals, paints, consumer products, etc.) has not been well-defined as compared to its counterparts in the discrete widgets manufacturing and fashion (apparel) industry segments.

Indeed, the process PLM solution market is currently a mosaic of established generic PLM providers and a plethora of specialized vendors with solutions that cater to only a part of the entire process PLM scope. The recent acquisition of Enginuity (mostly for its formula management capabilities) by Dassault Systemes only proves the point and the need for some consolidation in the market.

My post then analyzed typical workarounds to solve the puzzle of integrating these specialized solutions, most of which focus on structured data, which is insufficient for creating adequate multi-media product specifications in this day and age. 

Part 2 of the series analyzed other typical constraints of generic PLM solutions that claim process PLM expertise, such as the level of these process PLM vendors’ global enterprise support as well as available solution configuration options and ongoing change capabilities.

The series ended with the promise of separate future posts talking about some concrete process PLM add-on products that are already generally available (or that will be available soon). This post is the fulfillment of that promise.

To that end, what pains do these cloud-based or hybrid (on-premises and cloud) add-on solutions attempt to alleviate?

Cutting Costs in a Smart Manner

In addition to the prospect of a double-dip recession, process manufacturers will again be stressed by another cycle of rising strategic ingredients (and commodities) and energy costs. On top of this, the economy has taken a toll on their suppliers’ ability to ramp up production, and their viability may be at risk after all. Additionally, even if many regulatory-unfriendly US legislators currently do not care much for these issues, smart and consumer-oriented process manufacturers are still trying to meet market demands for increased sustainability and healthier products.

To respond to these pressures, most process manufacturers are touching every level of their product structure. For most companies, the area of the least resistance to change is to explore lower-cost material substitutions or alternate supplier certification reformulations. To reduce shipping costs, reduce packaging landfill content, and increase percentages of recyclable package content, manufacturers are creating new package variations and lightweight options of their primary packaging. But how might reacting to these pressures impact these companies’ process PLM implementations?

Exploring Lower-cost Ingredients

Reducing direct material costs by reformulating with lower cost alternate materials seems like a straightforward task, right? Well, assuming that all of the replacement materials are approved, are companies still limited by their PLM system’s standard cost accounting orientation?

Do they maintain plant- or region-specific cost databases and thus fall back on dreaded Microsoft Excel spreadsheets? Are the spreadsheet data up to date, or do certain groups or individual users already have customized spreadsheets? Are the calculations such as unit of measure (UOM) conversions accurate, and how can anyone be sure of that?

By leveraging solutions from a new crop of software as a service (SaaS) companies such as OakBarrel Software, companies can integrate independently managed and updated cost modeler solutions. Without having to reconfigure their PLM systems, deal with the myriad of spreadsheets, and maintain additional customizations, companies can securely model their formulas with average or actual costs from their enterprise resource planning (ERP) or supply chain management (SCM) applications. With integrated UOM and currency conversions, users no longer have to worry about inaccuracies in spreadsheets or bolt-on workarounds, which minimizes the chance of late-in-the-cycle approval failures and drives bottom-line cost savings.

New Materials and Suppliers Introduction

Lower-cost materials or alternate sources of supply often require sourcing and approving new materials or suppliers. This too would appear to be a straightforward proposition. Unfortunately, most of the PLM systems’ material and supplier data and processes have been in “live” use for several years.

These systems predate the recently introduced regulatory requirements, such as the need for the REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) registration, current allergen or organic certifications, corporate sustainability, quality screening questionnaires, and audits of suppliers, or the Hazard Analysis and Critical Control Points (HAACP) safety approach.

Without this data, research and development (R&D) departments will start with “dead in the water” supplier selections, or the time to approval will be extended. Since most PLM systems lack this type of data, previously approved material information is really incomplete and outdated, and the likelihood of late-in-the-cycle approval failures is increased. The result can be ineffective cost reductions and the need to attempt to push through price increases (and good luck with that attempt in this economic climate).

To that end, hosted regulatory content or business-to-business (B2B) integration solutions such as GXS and Agentrics for Food and consumer packaged good (CPG) or IHS’s Atrion for chemicals are designed to manage the complete material introduction process. By integrating these regulatory content repositories into their core PLM databases, companies can reduce their risks and drive more value without re-implementing or customizing their solutions.

Smarter Packaging

For most companies, the rate of packaging structure redesign has not kept pace with the rate of reformulation. With the steady pace of reformulation and legislation, most of the packaging activity has been oriented around branding or printed claims. To adequately protect their brands, companies need to improve management of their artwork/digital assets, and primary and secondary packaging. Historically, the highest percentage reason of US Food and Drug Administration (FDA) recalls is inaccurate label content.

The current artwork process can be best described as changing tires on a moving car. Since design, proofs, and printing are outsourced, the lead times and chances of introducing errors are increased. With each formula change, claims or product attribute content are likely to change as well. With each upcoming promotion or season, digital assets or claims may change. As the owner of the artwork, companies can minimize the cost of scrapped label by minimizing label content errors.

With a repeatable process and accurate label content, companies can minimize label development and print lead times as well as the amount of obsolete labels. Using marketing resource management (MRM) solutions such as Kodak Graphic Communications Group’s Design2Launch or KALLIK AMS360, companies can manage design, proofing, and printing of accurate labels, minimize scrapped or obsolete label costs, protect their brand, and minimize the risk of label inaccuracy based recalls.

As companies strive to eliminate excessive packaging content and weight and/or increase the percentage of recycled content (to reduce environmentally-unfriendly landfill content), primary and secondary packaging design becomes challenging. Primary packaging is the main package that holds the food that is being processed. Secondary packaging combines the primary packages into one box being made (tertiary packaging combines all of the secondary packages into one pallet).

Any possible formula interactions with the primary packaging (or any packaging that touches the primary package) impact the package’s compatibility, stability, leaching, shelf life, etc. Additionally, the printed label color and packaging color matching is often required. Most of the computer-aided design (CAD) vendors have solutions that can be used to design the packaging. To coordinate all components of the packaging and formula impact, products such as Infor’s Optiva PLM or Dassault Enovia can coordinate all aspects of packaging.

High-volume Product Rollups

As the rate of change increases, so does the need to ensure that the company’s higher levels of product information are accurate and complete. With many process PLM implementations exceeding a million formulas, some companies are struggling to complete formulas and product rollups within a day (or in a reasonable time).

Without complete and accurate data at levels of the product structure, brand and company image risks are increased. The aforementioned OakBarrel Software provides distributed roll-up engines that minimize the time to roll up millions of formulas and minimize risks to brands and company image.

Dynamic Product Info Publishing

For a B2B customer or retailer to buy a manufacturer’s product, the manufacturer has to create a customer- or product-specific specification and synchronize Product Information Management (PIM)-type data with retailer data pools and electronic catalogs. The manufacturer’s salespeople will need product datasheets, and customers will want to search the company’s Web site for product content.

Based on the fragmented nature of most PLM implementations and/or limited usage of the PLM system and data outside the R&D department, most companies fall back on using Microsoft Office applications or complex reporting methods. Without proper rules to identify reportable changes, manufacturers will likely be swamped with unnecessary product documentation requests.  With each unnecessary approval process, they will inevitably increase their time to market (TTM).

Even with these workarounds in place, maintaining the manufacturer’s Web site content and retailer data synchronization are disparate processes. With TTM reduction pressure, increased rates of change, and limited non-R&D usage of PLM, companies will need dynamic publishing processes.

These processes can pull PLM or other data, allow the entry of product- or customer-specific validation rules to determine what documents or data needs to be published, and manage the various publication processes. Without customization or complex reporting, OakBarrel Software provides extensible markup language (XML)-based dynamic finished goods publishing from PLM, ERP, or other data sources.

What Is OakBarrel Software?

OakBarrel Software is a newly formed party-owned subsidiary of BostonLogix (BLX), a turnkey commercial software development organization. It might be a lesser-known fact that BLX built a process PLM product Optiva (now Infor Optiva PLM) before there was a “PLM” software category (and acronym) per se. Another BLX product that is used today by Fortune 500 companies is GEMMS, now Oracle Process Manufacturing (OPM).

BLX builds dedicated development teams for its entrepreneur partners to design, build, deploy, and support commercial software products. The "A Team" of process manufacturing software experts at BLX are now the dedicated development team for OakBarrel Software and they are all investors in OakBarrel. BLX is thus OakBarrel’s outsourced software development and general and administrative (G&A) services provider.

Some collaborative OakBarrel applications (e.g., collaborative specifications) will only be available as a hybrid SaaS solution. Since many companies are still uncomfortable about cloud computing, the vendor will support on-premise solutions. The first two generally available (GA) products by OakBarrel, Material SpecSafe and Recipe Builder, are slated for this fall. Depending on the module’s scope, SaaS pricing will range from roughly US$250 to US$4,000 per month per module. The modules will integrate via XML and will leverage the other systems’ integration framework.

What the Future Might Bring

Since most PLM implementations are either formula-, specification-, product data management (PDM)-, or product portfolio management (PPM)-oriented, most companies have had to customize their enterprise solutions, maintain multiple standalone databases or solutions, and make extensive use of standalone Microsoft Office workarounds. Such PLM system implementation can slow TTM and significantly increase compliance, quality, and brand image risks.

If the core PLM system is hard to reconfigure, companies will be forced to increase the number of manual processes, customizations, and bolt-on solutions. With each of these workarounds, it’s just another brick in wall that will continue to impact future agility.

In future posts, we will provide more details on the S88 recipe (batch) management challenges, the impact of electronic lab notebooks, design of experiments (DoE), and new thoughts on phase or alignment gate management. Also, these posts will tackle other process PLM gaps, such as the processes and solutions to accommodate customer briefs or sample management, formula and process optimization, supplier collaboration with intellectual property (IP) protection, six sigma and lean PLM, and product configurators.

It is likely that by then OakBarel (and perhaps even some other brand new software companies) will have many more GA modules. Your views, comments, opinions, experiences, etc. about the abovementioned process PLM issues and solutions are welcome in the meantime.
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