Business integration of Product Lifecycle Management in the extended enterprise of Bang & Olufsen A/S

Tema: ´Afgangsprojekt´

(Graduation project)

Projekt 10
Formålet med projektenheden er at dokumentere at den studerende selvstændigt er i stand til at planlægge og gennemføre et projektforløb på et højt kvalitativt niveau.

This report is written at Bang & Olufsen in relation to a graduation project during the 10th. semester at the University of Aalborg within the area of industrial management.

The initiating problem for the project is ''Determine the need for PLM at B&O to accommodate PLM to the present issues as well as the future issues. Develop a long term strategy for the PLM system at B&O and present a more detailed solution for a selected area at B&O.''

To develop a solution that is suitable in the long run, we develop a scenario which reflects the way we believe the business of B&O is heading in the next ten years. A broad analysis is performed to find present issues as well as issues which are keeping B&O from reaching the scenario. The broad analysis reveals that B&O is facing a shift of paradigm with issues concerning management of information and knowledge. These are worsened by new ways of collaboration in a global context, and a change resistant culture.

Based on an examination of PLM the issues are found to be within the scope of PLM. A strategy for PLM at B&O is therefore developed for a ten year period, which attends to the issues which are keeping B&O from reaching the scenario.

The first part of the PLM strategy, and an area of responsibility at B&O, are selected to be the area for our solution. The chosen area of responsibility is named Operations and it attends to tasks such as production, production preparation and purchasing. As B&O is characterized by a vertical view, the solution is developed to avoid sub-optimization and to benefit B&O overall.

A detailed analysis of Operations is performed, to reveal the interfaces of Operations as they are of great importance for the solution. And to identify the functions in Operations to be able to reveal issues which are relevant for a PLM implementation.

The solution determines how a PLM system must be integrated and leveraged in the extended enterprise, to attend to the issues for Operations which are found in the detailed analysis. This includes B&O internal and its external partners.

The domains of PLM and other systems in Operations are examined and compared, to decide how ownership of processes and information must be divided and shared between PLM and the existing system domains. As a part of the solution automated integrations are made between the systems to exchange information and functionalities, in a way which supports B&O as an integrated business.

The result of the solution is that a PLM system must be extensively used by process- and quality-engineers internally in Operations, to support accessibility of the right information as well as support processes within Operations and across the organization. Particularly the fulfillment of a new quality standard, as well as improvement to engineering change management and concurrent engineering.

It is furthermore found that use of the PLM system are relevant for two of the segments in B&O's supplier segmentation. This is chosen to be by means of PLM functionalities in web enabled PLM licenses, which exchange documentation in a way that reduces the manual work at B&O.

It is found that PLM's ability to attend to the issues internally in Operations are good within the functionalities of PLM. However, the ability to integrate across IT systems to achieve the full PLM solution for an integrated enterprise, is a weakness limited by available technologies. The PLM functionalities used at the supplier are also expedient in the extended enterprise, but the integrations from external PLM licenses and into the IT systems of the suppliers are not automated.

The implementation plan and adoptive change management of our solution is developed with basis in Kotter's eight step model for cultural changes, combined with characteristics of our solution. The result is a top-down model, which must be detailed at an operational level as a proactive plan. This includes a mirroring of the technical aspects of the PLM system into the coherent adoptive change management. Execution of the adoptive change management is a critical element for a successful implementation and operation of our solution. Particularly in order to get the management in Operations to overcome the dominating vertical view and to choose the solution.

The assessment of quantifiable and unquantifiable advantages and disadvantages show that the solution is favorable based on a rough estimate. Our solution is estimated to be profitable two years after the full implementation and has furthermore annual savings at 1.4 mio. euro. However, the solution has additional significant benefits, which are not included in the economical assessment. This includes how the solution remedies future issues, such as knowledge management. It also enables the strategy for non-tangible products within after sale service as well as enables exploration of new business after implementation by improving the exploitation of the existing business.

We recommend that B&O implement the full solution, to the extend which is possible dependent of the abilities of the specific PLM system, which must be chosen and acquired as the next step.