According to a recent software forecast by IDC, the worldwide analytics software market is expected to grow at a 9.7% compound annual growth rate (CAGR) through 2017. But what does this actually mean for manufacturers? What options are available to manufacturing organizations seeking to leverage analytics, and in particular, PLM analytics, in order to make more informed decisions?
Manufacturers in the business of developing products create lots of data. Yet they typically struggle to make use of it all. Now they may have yet one more reason to start digging deeper.
Leveraging analytics in product development promises to provide a key competitive advantage for manufacturers, in a number of ways:
● By providing insight into the failure rates of parts or components, predictive analytics can help manufacturers improve product quality, safety, and reliability
● By integrating analytics such as real-time costing data with the product model, manufacturers can gain immediate insight into the potential cost implications of engineering or design changes
● By employing analytics during the design phase to alert manufacturers to the presence of any potentially hazardous materials, restricted substances, or conflict minerals across the supply chain - safer, more suitable alternatives can be selected, reducing risk, and avoiding costly penalties.
At the same time, the journey has really only just begun. The reality is that just a small percentage of manufacturers today have discovered how to unleash the value of analytics in their product design and development efforts.
PLM Analytics Is Still in the Early Stages for Most Manufacturers
As compared to the use of analytics to drive operational efficiencies or process improvements, the use of analytics to support PLM is still relatively new, and adoption rates vary among manufacturers.
Moreover, according to our research, even among those organizations that have embraced the use of analytics in product design and development, the rate of adoption and the extent to which analytics are being applied - is still relatively low. For example, across both the engineering-oriented and brand-oriented value chains, just 1 in 4 manufacturers indicate that they are currently using analytics to support PLM, according to our research.
We expect this number to grow as manufacturers, especially manufacturers of highly-engineered products, begin to more actively integrate analytics in product design, and, as a result, begin to realize key business benefits such as increased profitability, improved product quality, and reduced risk. Similarly, the use of analytics among brand-oriented manufacturers is also expected to increase, as these organizations seek to leverage product and customer data to more effectively manage costs, drive customer-led innovation, and protect brand and reputation.
PLM Analytics Offerings On the Rise
The reality is that PLM Analytics are quickly becoming a "must-have" for product manufacturers because of their potential business value. The real question is - what options are available for manufacturers seeking to embark on this journey?
The good news is that PLM providers and specialty software vendors are now placing greater emphasis on integrating analytics with PLM. More specifically, they are focusing their analytics efforts across the following three primary areas:
● Product Costing - providing visibility into targeted costs, estimated costs; real-time costing data, or predictions regarding part or component costs; anticipated price fluctuations; changes in availability of, or pricing of raw materials used; etc.
● Product Quality/Compliance - providing visibility into the supply chain, materials selection, supplier quality and sourcing, traceability at the part or component level, reliability indicators (e.g. MTBF, MTTF data), environmental and regulatory compliance (esp. REACH, RoHS, conflict mineral legislation, ELV, WEEE, etc.)
● Product and Portfolio Management -identifying bottlenecks that could impact delivery of overall product portfolio; use of customer analytics to drive product innovation, and the use of real-time market data to more quickly identify potential new target markets.
For more information on this topic, including adoption rates across selected industry verticals, vendor offerings, and guidance, subscribers can view the full perspective, Leveraging Analytics to Manage Product Quality, Cost, and Compliance. Your thoughts/feedback? As always, I welcome your comments and would love to hear about your company's initiatives in this area. Please include your comments below.