Thought Leadership

The challenges and benefits of PLM for component manufacturers in the cloud

By Blake Snodgrass

The product development process of PLM for cloud is changing and having a structural impact on the way a business operates.

In this transcript blog of our final podcast in the PLM Teamcenter X solution series, Mary McDonald, Global Industry Marketing Leader for small and medium business at Siemens Digital Industries Software, and Tim Yerby, Solution Director for Industrial Machinery at Siemens Digital Industries Software, discuss some of the significant obstacles and benefits that PLM for Components in the cloud provides to manufacturers.

Tim Yerby
Solution Director for Industrial Machinery at Siemens Digital Industries Software

Read the transcript below (or listen to the podcast) to learn the challenges and advantages of PLM for component manufacturers relevant to small to medium-sized companies.

Read the transcript

Mary: Hi everyone and welcome to this final session in the series of five on the impact of cloud and PLM on small and medium sized businesses. I am your host, Mary McDonald, Global Industry Marketing Leader for small and medium business at Siemens Digital Industries Software. Continuing our existing theme, we will discuss how the cloud is changing the product development process and having a fundamental impact on the way your business runs.

Mary Macdonald
Global Industry Marketing Leader for small and medium business at Siemens Digital Industries Software

Today I am joined by my colleague Tim Yerby, Solution Director for Industrial Machinery here at Siemens, who will be providing his insights on cloud-based PLM for component manufacturers. So, Tim, you joined Siemens from years working for small to medium manufacturers. Can you tell me a bit about your background?

Tim: Sure. So, for the first 15 or so years, I was on the manufacturing side and responsible for manufacturing and engineering as well as facility operations and maintenance.

And then for the last 20 years, my responsibilities were more on the product development, product design and the innovation side of the house. A fair number of those years I spent at component manufacturers, including some automotive component manufacturing organizations as well as some organizations that provided components into consumer and agricultural products.

Mary: When you were there with these companies and doing product development, design and innovation, what do you feel were some of the challenges in working for a smaller company to implement a digital environment or implement new technology, realizing that some had limited resources or were just comfortable with the status quo? What type of challenges did you see that are still relevant today with our smaller manufacturers?

Tim: I’ve seen basically the entire history and development of CAM. And then as we moved into product data management and product lifecycle management, we’ve seen that journey as well. So, the software has obviously gotten better and the capabilities have improved over the years, but there’s always the issue, particularly with smaller and medium sized businesses, about priorities, particularly the priorities of IT departments.

The key issue is often the resources needed in implementing and maintaining these systems. So, for a larger organization you might have dedicated staff who maintains the PLM system or manages the CAD or PLM system; whereas, smaller to medium business’ generally don’t have the luxury of an additional staff member or the cost structure that can enable additional staff. Therefore, the challenge for the smaller to medium sized business is getting the resources necessary to implement and maintain these kinds of systems. One of the things that I’ve seen is that as we’ve been on this journey with a couple of very small organizations where I worked, we would have cloud availability of systems or this packaged software where you can basically sign up and get going right away with a standard solution that may not be customized. Or, if it is customized, it’s customizable by the users or by the department manager and doesn’t require IT staff.

That’s one of the challenges that I’ve seen that has been key for small and medium businesses in being able to effectively implement systems without a lot of support from it.

Mary: That’s great. So that goes right into their perception of a PLM system being difficult to implement or, like you say, requires a dedicated IT resource. Or, maybe it’s just too expensive. So, with cloud and now SaaS, how does a smaller manufacturer finally take advantage of a PLM system? And what would you consider are the first steps they should be looking at to implement PLM with those constraints around resources?

Tim: I think the constraint you start thinking about obviously is, will it work with our CAD system? And that’s always a big question. I’ve got all these seats of CAD and I’ve got all this data and is it going to work? So that really is an important first step just to understanding what will work with your current system. Beyond that you’re thinking, what company can assure me that they can handle my CAD data and will it remain the same because we don’t want to change the CAD system just to go to PLM?

We’re just going to utilize it and manage it with the new PLM system, then the next steps are, of course, a more technical capability. Questions such as, can it handle change management?  Or, is it going to manage my engineering change process?

And then there’s of course the integrations and what’s going to happen to it because the process doesn’t end with PLM. The main purpose of PLM is to make sure that your CAD data and you’re bill of material (BOM) data can be utilized by the rest of the organization. The rest of the organization, of course, being your ERP.

Also, there’s the MRP systems and your manufacturing system. If you’re making components in-house, or pieces in-house, can they use that BOM data and say, here’s how we plan the manufacturing process based on that. Or here’s the pieces we need to manufacture to make the finished product.

Mary: One of the goals that we’re seeing for PLM for component manufacturers is to avoid a change in process or a change in how someone does their job. Instead, we’re trying to remove the day-to-day headaches and barriers that many manufacturers face by helping to create a more efficient process. So, speaking about those types of headaches or inefficiencies, Tim, and your experience, what kind of issues did you particularly see?

Tim: Well, one of the things that was always a bit of a headache is the release process. As you get into situations where project timelines are tight and you’re a manufacturer of a gear motor (a component that goes into a larger machine somewhere) and the customer needs a custom design, you are going to reuse 80 percent of the bill of material. So, you only must customize about 20 percent, right? Well, the manufacturing organization wants the build of material released in its entirety.

But if that’s what you’re going to do, it means I must hold 80 percent of the bill of material that I’m going to reuse until the 20 percent that I have to modify and customize is finished. That is not an efficient system, especially when timelines are tight.

For the supply chain, one of the things that the organization needs are a process and data management that allows you to release this 80 percent of the bill of material that’s ready to go, because we’re not changing it. We’re not changing the guts of the mode or we’re not changing the motor itself. Also, maybe we’re not even changing the gears and the gear motor, but we’ll have to change the housing and maybe the mounting brackets. So that’s the 20 percent I have to modify and I’m going to release the 80 percent.

That sort of hybrid release process can cause organization issues if you don’t have a nimble PLM system, because then you run into what’s changed and what hasn’t changed, what’s been released, what has not been released, and you must handle it with rolling releases. Therefore, when we ran into that issue previously, it took a bit of work going through the process to make sure that everybody understood we were going to release pieces as soon as they were done because you want to give your supply chain personnel as much lead time as possible to acquire those pieces.

Mary: When you talk about needing a nimble PLM system, how do you actually see PLM for component manufacturers being that advantage?

Tim: There are a couple things. Teamcenter is the gold standard in the industry with respect to PLM management. So, one of the big advantages I see for small to medium businesses is providing this type of technology that may have been previously only available to large enterprises that could afford and support it, or because they needed a large services engagement or customization work to set up for their process. Siemens has now created this type of an industry standard process.

That should work for most customers, essentially out-of-the-box, and even if it needs a little bit of customization, it’s not a lot of customization. So, any consulting or services cost is much smaller. That is probably the single biggest advantage. Another one that a lot of people don’t think about, but particularly as we think about moving to cloud or SaaS versus years past is engaging in a significant piece of software usually meant a substantial commitment in terms of capital as well as the resources. And then once companies made that commitment, they were going to make what they committed to work, come hell or highwater, right?

Even if it required sort of doubling down on their investment, one of the things this does with the SaaS model is organizations can dip their toe in the water, if you will. Maybe it starts in one department. It doesn’t have to be an all or nothing investment. You don’t have to switch over everything with a big bang type changeover where you can’t do any work for two weeks because there’s some sort of bug in the system. But with SaaS, and the monthly commitment, you could say we’re going to give it a try and work the bugs out in that department.

You have not made a jacket commitment. It’s not a multi $1,000,000 commitment that is going to take you through six to nine months of consulting engagement to get to a solution. You sign up with a certain number of users, there’s a monthly fee, you can add users, and roll it out across your organization. Maybe you can even build in some of our additional modules and just continue to grow with your organization if you decide you don’t like it. It’s not working out for whatever reason, you just turn it off, and quit paying.

So, it’s a less risky proposition. You’re sort of de-risking trying these new software solutions.

Mary: That’s great, Tim. If you had a group of manufacturers sitting in a room today, what’s the one thing that you would want to get across to them? How would they begin the process of introducing new technology or building an efficient PLM process?

Tim: Again, I think it’s the ability to quickly get started and try it out with that low commitment cost. It’s just a monthly subscription cost. In most organizations that decision is made at the department level and doesn’t need to go to the VP. It’s a situation where you just say we’re going to sign out for this subscription for this software. Or we’re going to test it out. But once it’s in and it’s proven that it’s working, that’s a different story. It’s easier to get going with new technology than if you have to justify it.

Figure the investment and just go ahead and do it. It’s almost the Nike slogan of just do it. Just try it out.

If it saves your team hours of work, then you can go ahead and agree it is working great, then you need to expand it.

Mary: Thanks, Tim. This is great and has been a great conversation in talking about PLM. And thanks for joining us in the discussion about how PLM for component manufacturers are introducing new opportunities and address day-to-day challenges and headaches by many small to medium business’ and showing us how technology and the introduction of SaaS solutions provide avenues to innovation.

And again, thanks to our listeners for joining us.

Siemens Xcelerator, the comprehensive and integrated portfolio of software and services from Siemens Digital Industries Software, helps companies of all sizes create and leverage a comprehensive digital twin that provides organizations with new insights, opportunities and levels of automation to drive innovation.

For more information on Siemens Digital Industries Software products and services, visit or follow us on LinkedInTwitterFacebook and Instagram. Siemens Digital Industries Software – where today meets tomorrow.

Stay up to date with the Siemens Software news you need the most.


One thought about “The challenges and benefits of PLM for component manufacturers in the cloud

Leave a Reply

This article first appeared on the Siemens Digital Industries Software blog at