BigLever and Aras Deliver Product Line Engineering Integration

By | M&A, PLM | 3 Comments

Product Line Engineering: Rethinking Product Development

BigLever Software, a provider of product line engineering software, announced today that the company has partnered with Aras Corp. to deliver an integration between product line engineering (PLE) and product lifecycle management (PLM) software suites.

The integration enables product designers to define product options and variants in BigLever’s Gears software and communicate them directly to Aras Innovator PLM tool to generate a complete bill of materials for each product variant. This helps configuration engineers handle the increased complexity in product architectures, and, in particular, the proliferation of embedded control software modules.

To understand the significance of this announcement, a brief, somewhat technical, explanation of PLE is necessary.

What is PLE Anyway?

The need for higher density and richer repertoire of product functionality to meet consumer expectations and establish market differentiation continues to burden brand owners. Marketers and designers need to add product features at a high pace, frequently utilizing embedded electronics and control software to add functionality and configure products to specific markers and demographics. The result is often a large and complex set of product configurations and variants that include not only hardware and software components, but also test scripts, manufacturing work instructions, compliance certificates, user documentation, and more.

In a typical product development process, market requirements are decomposed into functions that are mapped onto a hierarchical bill of materials (BOM) structure. Individual BOM items are grouped to form the configurations and option packages that can be manufactured and sold to consumers, such as the option to add power windows and locks to a car, or a higher end PC “bundle” that includes expanded memory capacity and a fast graphic card. Frequently, rules have to be defined for “allowable” configurations to reflect design constraints, product pricing strategy, and other technical and business considerations.

Many engineering organizations find the complexity of culling BOM items (and their associated non-BOM objects) and creating “packages” for design, manufacturing, sales and support extremely difficult to handle. And the fact that many product companies use manual processes supported by an assortment of databases and spreadsheets to manage product configurations doesn’t do much to alleviate the situation.

Inverting the Process

Product line engineering takes a different approach to decomposing requirements into product design variants. Rather than starting the configuration process with an existing BOM, PLE starts with the set of “features” that are put together to form valid functional configurations as defined by the product functional requirements; for instance, a power windows “package.” The important distinction is that features do not have to correspond to physical parts. Rather, they describe functionality units linked directly to functional requirements and managed at a functional level.

In essence, one can see the product description in PLE as a bill of features containing all physical and virtual artifacts such as mechanical, electrical, wiring, software, calibrations, requirements, designs, test cases, documentation, and so forth.

The bill of features isn’t limited to itemizing features that must be engineered and manufactured in the traditional sense.  It can include, for example, the different warranty terms and bundled services for each configuration.

As importantly, features are canonical and not product or design specific, and therefore are easy to understand and manage even before the actual design has started. Feature “dictionaries” can be shared and reused across multiple products in a manner that reduces configuration management complexity and errors.


With a direct PLM-PLE integration such as the one demonstrated by Aras and BigLever, configuration engineers do not use external documents to configure a BOM for a specific product and hope that all the needed components (and only these) are included. Instead, an engineer uses Gears, BigLever’s PLE software to select the desired functionality “package.” Gears generates the list of features for each desired configuration and send it directly to Aras Innovator to generate the bill of materials.

Why is this Important?

As discusses earlier, some organizations find that managing complex product configurations and options can be a labor intensive, time consuming and error prone activity.

One outcome of this complexity that is seldom discussed openly is its impact on product testing. Because of the large number of product variants and seemingly endless number of permutations and dependencies between individual parts and subsystems, the generation of relevant and effective test cases is a dauntingly complex and time consuming task that still does not guarantee complete test coverage. Consequently,   products undergo insufficient testing, precious resources go to waste, and project schedule and quality are jeopardized.

With PLE, only the relevant features—and therefore only affected parts and software modules­­—are selected. If test cases for a specific configuration exit, they will be included automatically, or, new ones can be designed and included in the bill of features for future use.


The integration of between Gears and Aras Innovator can help companies reduce complexity, enhance efficiency, and improve the accuracy and completeness of product configurations.

Aras users that manage variant-rich product portfolios would benefit from the new ability to manage requirements and complex feature set in Gears and keep Aras Innovator BOMs in sync.

Gear’s users, not all of them are also Aras users, should consider implementing a small proof of concept PLE project using Aras Innovator to gauge the benefit of a direct PLE-PLM gateway firsthand and discuss it with their PLM software vendor.


Kalypso Acquires GoEngineer

By | Aquisition, M&A, PLM, Strategy | No Comments

PLM consulting firm Kalypso announced a strategic partnership with GoEngineer, a reseller of Oracle Agile PLM and Dassault Systèmes SOLIDWORKS 3D CAD software, and provider of PLM hosting, integration, implementation and training services. Although according to the press release “Kalypso has acquired GoEngineer’s implementation services business” no financial information was disclosed.

Under the new structure, Kalypso gets GoEngineer’s implementation services business and GoEngineer will continue to focus on providing PLM cloud services.


GoEngineer’s implementation services strengthen Kalypso’s portfolio and delivery capabilities in a number of ways, allowing it to broaden its reach into industries and product lifecycle activities in which Kalypso wasn’t as strong:

  • eCAD customers. GoEngineer has a Zuken practice.
  • 3D Printing: GoEngineer has capabilities in 3D printers from Stratasys and Objet (merged with Stratasys in 2012)
  • Industries: GoEngineer has strong presence in manufacturing, high-tech, medical equipment and energy

And, of course, Kalypso will benefit from additional PLM implementation resources as well as experience and facilities for hosted PLM software. The latter supports Kalypso’s previous announcement of the launch of managed services for PLM applications.

Kalypso customers will certainly benefit from a broader ser of expertise and capabilities.

Overall, this deal is yet another step in a number of acquisitions and relationships Kalypso is pursuing to enhance their position in PLM implementation services (most notably, the merger with Integware in May, 2014) and ability to serve both large enterprises and small and medium-sized business (SMB).

A Defensive Move

The new arrangement is defensive move that offers Kalypso a couple of advantages. First, it supplements Kalypso’s “innovation” consulting business, which is complex, requires expensive and scarce talent, and is becoming more competitive and harder to scale as top-tier consultants like Accenture, CapGemini and Deloitte are offering product innovation and development consulting services.

At the same time, by adding more implementation and integration services, and acquiring customers in new industries, the Kalypso is well positioned to compete with PLM service providers, including Accenture, KPIT, Prolim, and the PLM software vendors themselves.

GoEngineer stands to benefit by getting a much needed business focus. Over the years the company expanded into many industries and functional areas and has become too thin to the point it couldn’t scale. Relinquishing the implementation services to Kalypso and focusing on running the hosting services separately will help GoEngineer capitalize on the growing interest in hosted on demand PLM solutions.


Stratasys Acquires GrabCAD

By | Aquisition, IT Strategy, M&A, Manufacturing, Strategy | No Comments

Stratasys Acquires GrabCAD: Analysis and Implications

3D printer company Stratasys announced today of definite plans to acquire Cambridge, Mass.-based GrabCAD. GrabCAD is known for spearheading efforts to create an “open engineering” environment that allows engineers to share 3D CAD models. Terms of the transaction were not disclosed, but the price is estimated to be about $100 million. This is the latest in a string of acquisitions by Stratasys. Previous notable additions include MakerBot last year for $403 million and Solid Concepts earlier this year for $295 million. GrabCAD co-founder and CEO Hardi Meybaum will continue to head GrabCAD within the Stratasys group operations.

Since its launch in 2010, GrabCAD has amassed a user base of 1.5 million mechanical designers and a database of 520,000 3D CAD models, ranging from novelty items and toys to guns to complex models of gearboxes and 5-axis CNC machines. However, revenues of the venture-backed company did not track this trajectory.

On its surface, the acquisition of GrabCAD gives Stratasys some interesting additions, well articulated in the company’s press release:

Knowledge: With the addition of GrabCAD, Stratasys gains an industry leading team of software professionals with a deep understanding of the needs of designers and engineers.

Products: GrabCAD’s cloud-based collaboration platform, Workbench, will enable Stratasys to offer customers a solution to drive communication and ease of use throughout the design and 3D printing process. GrabCAD also provides Stratasys with the opportunity to further partner with CAD vendors and other ecosystem partners while offering innovative collaboration tools related to 3D CAD.

Community: GrabCAD has built a global, leading and fast growing community of mechanical engineers and designers, with 1.5 million users who are passionate about design. This includes a large online community of M-CAD users and a significant public online repository of free CAD files, with more than 500,000 CAD designs available for download and nearly 50,000 file downloads per day.

The long-term value for GrabCAD and its user community isn’t as straightforward. The company will certainly enjoy deeper pockets and additional resources, but the ability to align the open-source community and the hardware business may prove challenging. While some synergy within the hobbyist and “makers” communities of both companies is feasible, the path on the more industrial and professional side may prove more challenging, especially when it comes to sharing 3D models and design IP.

What remains to be seen is how Stratasys, which, after all, is a hardware company whose primary business is selling 3D printers and consumables, going to leverage GrabCAD’s major asset—an active community of 3D designers and engineers—to drive additional product and services revenue.

To realize the full potential of the acquisition, Stratasys will have to:

  • Work diligently to maintain the collaboration and open source culture of the GrabCAD community.
  • Continue to develop GrabCAD’s Workbench tool and drive greater awareness and confidence in its ability to facilitate “industrial strength” collaboration and IP management environment.
  • Use this foundation to support and deliver additional services—both organically and through partnership—that are not directly dependent on Stratasys 3D hardware and materials.


PLM Service Providers Ready To Deliver Greater Value

By | Aquisition, ERP, IT Strategy, M&A, Manufacturing, PLM, Strategy | No Comments

What Do Recent Mergers and Acquisitions of PM Services Companies Mean for Manufacturing Companies?

Recently we have been witnessing a wave of mergers and acquisitions of PLM services companies. Here are some examples, listed chronologically:

  • In October 2013, Accenture announced the acquisition of the PRION Group – a consulting and systems integrator that specializes in Siemens PLM software.
  • Later that month, Accenture announced plans to acquire PCO Innovation, another PLM consulting group.
  • In April, 2014, KPIT Technologies reported the acquisition of I-Cubed, a PLM product and services company specializing in PLM data migration. Only a few months earlier, I-Cubed acquired Akoya, a should-cost analytic software company.
  • On May 21, 2014, Kalypso, an innovation consulting company announced it had merged with PLM consulting firm Integware,

I don’t think the increased activity in of mergers and acquisitions focusing on PLM services, or the fact that Accenture all of a sudden is paying attention to PLM is a mere coincidence. Rather, it is an indication of a gradual change in how enterprises view product lifecycle management, the role of PLM software in the enterprise, and, with those, new opportunities for PLM related growth.

For years, PLM companies focused more on PLM /PDM implementation than on actually improving business processes. While the business benefits of PLM were well articulated and supported by rosy ROI models and complex colorful architecture slides, many manufacturing companies were unable to achieve the process changes and enterprise software integration that were need to reap the promised benefits, and ended up implementing a PDM system. Albeit critical for managing product data, this reality might explain why some manufacturers feel they might have overpaid for their PLM implementation efforts.

The status quo may be changing, and organizations that have gone through massive implementation projects are ready for more. They need to improve their capacity for more complex multidisciplinary decisions using product data, whether it’s stored in PLM/PDM, ERP or in other, less structured forms; they need to improve collaboration in elongated and fragmented design partner networks and supply chains; they need to leverage product and consumer insight garnered  from social media, warranty claims, and channel activities.

Indeed, a great deal of this movement is driven by PLM vendors, flaunting new ideas and vying to show value in a pretty much non-differentiating arena. Likewise, services companies such as those mentioned in the opening part of this article are trying to add capabilities and scale to capture new business opportunities in activities that I often lump under the umbrella of “enterprise PLM.”

And there’s more. The availability of cloud-based PLM 360 from Autodesk, and modern, flexible and easy to consume PDM software from companies like Aras and GrabCAD, while perhaps not enough to challenge the hegemony of Dassault Systèmes, PTC and Siemens, certainly raises the bar and put pressure on the traditional PLM vendors to demonstrate similar functionality and aptitude that are better aligned with modern enterprises.

However, with the exception of Accenture, the PLM services companies we’ve mentioned are small companies that while relatively successful, are unable to scale to fulfill the market demand for deep domain expertise and competence to deal with business process complexity. In fact, Accenture’s aggressive push into the space of previously occupied by boutique consultancies poses a risk to many of these companies.

More Mergers and Acquisitions on the Horizon

I expect we will see more mergers and acquisitions of PLM and technology consulting companies, especially in the burgeoning area of ALM and in complex simulation. There are a number of small but capable companies in this space that are unable to scale unless they become part of a broader underpinning and are less resources constrained. It wouldn’t be right to name them here (feel free to contact me directly if you are interested in discussing them.)

Manufacturing companies should pursue opportunities to leverage product data to improve product related decisions, especially in downstream activities such as DFX, serviceability improvement and supply chain optimization. Look for partners and providers that offer a broad portfolio of domain and process expertise along the entire product lifecycle and strong process integration capabilities in addition to “just” IT.


Should Cost Analytics

By | Aquisition, M&A, Manufacturing, Strategy | No Comments

How to Figure Out the True Cost of a Manufactured Part?

Manufacturing companies in today’s global economy rely on an intricate network of global and local suppliers. With typically more than 50% of operational cost is tied up in their supply chain, manufacturers must closely manage and continually optimize supply chain operations, balancing quality, cost, risk and resilience.

Research shows that in a typical manufacturing company, as many as 30% of purchased parts are not priced optimally: either suppliers are charging excessively for parts that can be sourced elsewhere under more competitive terms, or market competition and aggressively negotiated supplier contracts have resulted in lower quality parts and greater supply chain risks. Furthermore, it is common to find identical parts sourced in small quantities from multiple suppliers, reducing negotiation leverage, bloating inventories and introducing further waste into the supply chain.

In some markets, multiple vendors and strong competition may suffice to drive down prices and ensure high quality and level of service. But in markets where there are only a few suppliers, buyers’ options are limited and optimizing supply chain decisions can be difficult.

While these challenges are well recognized, making effective part sourcing decisions and negotiating optimal pricing aren’t easy, and most manufacturers do not have an objective and consistent means to rationalize supplier relationships.

The ability to determine the true cost of a part in a systematic fashion gives both manufacturers and suppliers critical tools that should be utilized during design, sourcing and bidding activities. Below are some use cases and examples of how “should cost” analytics can be used during key product lifecycle phases.

 Supply Chain Optimization

As stated in the foreword, more than half of operational spend of large manufacturing organizations is tied up in the supply chain. Reducing the number of suppliers and optimizing contracts for each supplier’s capabilities can help companies reduce supply chain waste, manage inventory costs and improve overall operational efficiency of their supply chain.

Everest Institute research estimates that companies can achieve 22-28% cost savings by utilizing their existing supplier base instead of adding suppliers and rebidding contracts:

  • 35-40% one-time cost reduction by avoiding setup and on-boarding
  • 20-25% reduction in operations and internal overhead

Akoya, a part-costing data analytics software company, conducted an analysis of cast parts at a large manufacturer of heavy equipment. The analysis of 1,137 cast parts from 39 different suppliers showed that 24% of the parts were priced 25% or higher than they should. The analysis revealed that selecting lower cost suppliers and renegotiating fair prices for those parts would result in annual cost savings of approximately $21M. The figure below is of a typical analysis, showing clusters of similar parts that are priced above or below the average for that class of parts.

Should Cost Analysis

(Source: Akoya)





Bidding and Contracting

Shifting the discussion from buyers to suppliers, many suppliers do not have a systematic and reliable method to estimate the cost to produce a product. All too often they resort to a ballpark cost estimate and adding a lump sum percentage for overhead. In competitive situations, these suppliers may quote high price and lose the bid, or, potentially worse, their price will be low enough to win the contract but will a negative impact the profitability of the deal.

A data-driven analytic approach to manufacturing cost estimate reduces the time and effort to respond to request for cost proposals, provide accurate appraisal of actual cost and profit margins, and support the evaluation of design and manufacturing alternatives, volume pricing, and the like.

And the same approach benefits those that evaluate supplier responses: identify excessive price quotes – whether too high or too low – and help in selecting the best suppliers to conduct business with.

 Product Design

Multiple studies that show that demonstrate that most of a product manufacturing cost is determined during early design phases have been around for decades, yet they are generally ignored until a cost takeout campaign is initiated, at which point the manufacturer has already incurred significant loss and the ability to optimize cost decisions is very limited.

Accurate cost information can be beneficial in a number of design engineering activities, such as:

  • Input for manufacturing cost analyses, weighing alternative sources and manufacturing methods before the design is frozen.
  • ECO management: assessment of cost ramifications of a design change or switching to a different supplier.
  • Cost reduction / cost take-out campaigns.

What is 3D Part Cost Analytics?

The first question that comes to mind, then, is how to determine the true manufacturing cost of a part, especially if that exact part has never been manufactured before.

Advanced 3D cost analytics is based on a part’s 3D CAD model. By analyzing the key features of a design: dimensions, tolerances, weight, etc., and of the manufacturing processes: machining, drilling, heat treating, etc., and using a detailed database of various manufacturing processes, industry standards, and associated cost, analytic software can estimate the target cost of making a part based on the market price of similar parts.

Activity based costing is an alternative method for estimating part manufacturing cost. It identifies the manufacturing activities involved in manufacturing the part, such as casting, stamping, forging, drilling and finishing, and uses standardized labor, machinery and overhead costs to calculate the actual manufacturing cost of that part.

Market prices are derived from a broad range of sources. These include a company’s supply base, supplier catalogs, comparisons of supplier responses to bid requests, and company specific design rules and “should cost” target guidelines.

Both methodologies have value and can be used to complement each other. Whereas 3D part analytics focuses on a “bill of features” to identify like parts, activity based costing uses a “bill of activities” to do the same.


Instead of the periodic but infrequent cost takeout and supplier rationalization campaigns, manufacturing companies should employ “should cost” analysis as an ongoing best practice. Using a structured approach and analytic tools, manufacturers should be able to introduce cost and supply chain consideration earlier in the product design, negotiate fair prices with their suppliers, and achieve greater efficiency and risk resilience in their supply chain.

“Should cost” models are not designed to be completely accurate, nor should they be used as the only decision criterion in selecting a supplier. They need to identify areas of cost optimization opportunities and help identify and assess alternatives for cost savings and supply chain optimization.

Not all manufacturing costs are controllable. A “should cost” analysis helps identify areas of cost that can be improved such as over-specification of tolerances is a major driver of cost. The analysis can identify existing designs and inventory parts that can meet the design specifications – possibly restated – at lower cost.

Obviously, an optimal design and efficient supply chain aren’t only about driving suppliers’ cost down. In fact, over-leaning the supply chain by focusing on lowest cost suppliers, pressuring supplier profits, and implementing very lean just-in-time inventory strategy will likely introduce unnecessary risks and result in a fragile supply chain.

Suppliers can be a great source of cost reduction innovation. This is a significant source of cost savings, and one that is typically overlooked by traditional procurement organizations.

Why Now?

This topic isn’t new. You can find blog discussions dating back several years that followed the regular hype cycle of analysts and bloggers discussions: they start in a flurry and then die very quickly so we can free up the blog space for the new hot topic de jure. But two recent acquisitions might bring conversations on “should cost” analytics and other PLM activities that were relegated to a back seat role. In March, Akoya, a “should cost” analytic software company was acquired by I-Cubed. Subsequently, I-Cubed’s PLM business was acquired by KPIT, an India-based global IT consulting and product engineering company.