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13 Apr200603-23-05Product Lifecycle Management OverviewPurdue University PLM Center of ExcellenceRex LaRowe, Director - Manufacturing Industry Frameworkpage 1 EDS Confidential

Agenda Introductions Definition of PLM The Problem EDS’ Approach Suggestions for PLM Center of Excellence DiscussionsEDS Manufacturing13 Apr 2006page 2 EDS Confidential

Product Lifecycle Management (PLM) DefinitionPLM is defined as: A strategic business approach that applies a consistent set of businesssolutions that support the collaborative creation, management,dissemination, and use of product definition information Supporting the extended enterprise (customers, design and supplypartners, etc.) Spanning from concept to end of life of a product or plant Integrating people, processes, business systems, and informationPLM is not a definition of a piece, or pieces of technology.Source: CIMdataEDS Manufacturing13 Apr 2006page 3 EDS Confidential

Fundamental Concepts of PLM Universal, secure, managed access and use of product definitioninformation Maintaining the integrity of that product definition and related informationthroughout the life of the product or plant Managing and maintaining business processes used to create, manage,disseminate, share and use the information.EDS Manufacturing13 Apr 2006page 4 EDS Confidential

The Scope of PLMPlus the engineering businesssystems to make the PD processwork with the Productrest of the companyLifecycleEDS Manufacturing13 Apr 2006page 5 EDS Confidential

The Challenge for PLMEDS Manufacturing13 Apr 2006page 6 EDS Confidential

It has been difficult to document impact of PLM oncompanies financial performanceThis example opportunity and gap analysis identifies the specific operations improvements and associatedopportunities.Financial ngiblesBalanceSheetSourceEDS/A. T. Kearney - ConfidentialEDS ManufacturingOpportunityOperations ImprovementsOne TimeChargesQuality andregulatorycomplianceimprovement30 – 80% Manufacturing standards25 – 65% Cost of Quality (prevention)SalesIncrease in revenue10 – 75% Time to market5 – 50% SalesCOGSUnit Cost reduction25 – 65% Cost of Quality (QFD)30 – 70% Bill of Material accuracy10 – 20% First Time Quality2 – 5% Warranty CostsSG&AReduction inSG&A12 – 30% Marketing effort24 – 50% Group technologyR&D andEngineeringReduction inengineering costs15 – 45% Engineering change order20 – 60% Non-Recurring engineering20 – 55% Part proliferation90% Early defect detection30 –70% Bill of Material5 – 10% Lost Units / Lost HoursMaterialsand SuppliesSourcing componentstandardization15 – 35% Supplier rationalization20 – 60% Procurement Efficiency30 – 80% Cost of Quality (appraisal)Supplier Effectiveness (quality, on-time delivery)FixedAssetsReduce capitalexpenditures20 – 65% Outsourcing20 – 50% Return on assetsWorking Capital15 – 50% Production planning/utilization16 – 40% Capacity utilization25 – 50% Profitability30 – 85% Process YieldsAccountsReceivable13 Apr 2006page 7 EDS Confidential

Technology ModernizationThe technologymodernization processenables the transformationfrom the function specificapplications and data storesto an enterprise view of dataand a services-basedapproach toward businessapplications.Industry ModelEDS’ A3 tionBPM/BAMBIReporting TM PersonalisedVisualisation AI/EIIAdaptersMeta-DataCustomAdaptersspr ea d sh e e tstsConfigurationMgmtAdaptersBusinessRulesData Marts& WarehousesFlProcesses / Datao /Services wsMessaging & InterfaceStandardsTransformationsspr ea d sh e e tsServiceDeskAdaptersSysMgmtAdaptersTii vovo liliTMe tho d olo gie sNi k uSASSu pppp oror tt SS oftoftSuPa trotro llPaMSGe ner a lLe d gerPr o jec tspr ea d sh e e tsNe tCtC oooollNeData andToolsIn the “SilosofTechnology”Pro jec tTr ac ki n gSy s te mDVDVThe “Re-” steps usedmodernize the technology setthe foundation for a servicesapproach toward thetechnology layers of anorganization’s solutions.D ococ countingSWEEP3TrafficWIZARD# ofConnections221# mputing Styles, Patterns, StacksSTYLES OF COMPUTINGNonstopMarketOAGSWAOnBoardBookOSS MartIMPLEMENTATION PATTERNSREFERENCE STACKSClassic 3-Tier W eb AppMktDSSOnline TransactionalEvent ProcessingClassic 4-Tier W eb App.NET / ADE Reference StackW orkflowTraditional Batch31Historical Analytical314-Tier Integration AppJ2EE / RCF Reference StackNear-time DecisioningReal-Time DecisioningEDS Manufacturing13 Apr 2006page 8 EDS Confidential

Levels of OptimizationLevel 1 – SiloedOptim ization Business processes areoptimized and work wellduring normaloperations. “Like”operations requireduplicative systems anddataLevel 1 – Siloed OptimizationBusiness UnitsLevel 2 – AggregatedOptim izationLevel 2 – Aggregated OptimizationIPDMfg OpsSupplyChain Business processes aregrouped together toreduce duplication; andwork well during normaloperations. Does notsolve enterpriseinvestment & irregularoperations issuesAftermktLevel 3 – Cross Functional OptimizationIPDMfg OpsSupplyChainAftermktWarranty Incident Business processes aregrouped together; datais shared in context ofthe business situation.The customer & supplierviews are optimized aswell as the internalbusiness structuresSupplier DefaultEDS ManufacturingLevel 3 – CrossFunctionalOptim ization13 Apr 2006page 9 EDS Confidential

There are several stages of maturity within an product developmentorganization’s IT environmentIT ElementInfrastructureLevel 1Initial Disconnected, slow,narrow pipeLevel 2Repeatable Area solutionsdeveloped to manageincreased loadLevel 3Defined Regional solutionsdeveloped to manageincreased, integratedloadLevel 4ManagedLevel 5Optimized Common architecturedeveloped Single common, highspeed, widebandwidth, highavailability, flexiblearchitecture deployed Full supplierintegrationApplicationsArchitectureData Disconnected,uncoordinated, noversion control Major applicationschoices limited to ahandful Limited to nointegration Proliferation ofapplications as IT gainsacceptance Individually developedand stored data files,formatted per engineerpreference (hard copyincluded) Applications becomemore and moreintegrated –complexity ensues Integration withsuppliers commences Single Bill of ITdecided but not totallyimplemented Varying versions ofsame application stilldeployed Single integrated Billof IT with commonversioningimplemented Full supplierintegration Supplier integrationmore robust Virtually all datamoves to electronic Site-specific dataformat, storage andretention promulgated File namingconventions absent Data availabilityacross engineerslimited File namingconventionspromulgated Data format, storage,retention andavailabilitystandardized acrossregions File namingconventions, format,storage, retention andavailabilitystandardized globally Single formattingdesign, integrated andglobally accessible Tagging conventionsimmature butburgeoning Relational tagging toassociated dies, jigs,cost, test, sourcing,financial, etc. Common tagging foreasy search capability Full supplierintegrationApplicationsdevelopment CMMi 1 CMMi 2 CMMi 3 CMMi 4 CMMi 5Operations Unique ops processesby site Each site hasdocumented opsprocesses Common metricsdeveloped anddeployed Global commonprocesses, tools andmetrics developed Fully deployed ITILprocesses Metrics developed atsite level Tools and processescontinue to be sitespecific Deliverytransformationcommences No metrics developedor captured No common ops toolsdeployedEDS Manufacturing No common ops toolsdeployed13 Apr 2006page 10 EDS Confidential

EDS’ ApproachEDS Manufacturing13 Apr 2006page 11 EDS Confidential

There are natural dependencies in moving towards Level 5product development IT nCommonprocess,tools mplex applications and data architecture subverts movement towards an agile and easilymaintained base upon which companies can transform critical product development processesEDS Manufacturing13 Apr 2006page 12 EDS Confidential

The journey from the current PLM state and the future hasseveral challengesChallengesCurrent State Future StateRequires significant fundingHas long project lead timesOver 300 Systems Large monolith legacy systems –(over 175 mainframe apps) Regionally developed systems withhardwired business rules Partially rationalized Bill of IT, Bill ofArchitecture, Bill of Infrastructure High degree of uptime but costly tochange Subject to inherent risk oflarge COTS deployments Must drive business valuealong the wayRequires substantial businessinvolvementBalancing global and regionalneedsUnder 20 Systems Global, standard solutions Primarily COTS based systems basedon industry best practices Highly rationalized Bill of IT, Bill ofArchitecture, Bill of Infrastructure High degree of uptime and minimalcost to changeActual client exampleEDS Manufacturing13 Apr 2006page 13 EDS Confidential

EDS has learned that comprehensive portfolio transformation requires along term view and some guiding principals to be effective Client Ownership - The client must take ownership and drive thetransformation Global and Common Processes - IT is the key enabler. ITtransformation must be focused on driving globalization while balancingkey regional needs Agility is the name of the Game – Creating an agile IT environment(SOA – A3) is the foundation for driving and keeping complexity out ofthe IT portfolio. No Quick Fix - Requires comprehensive approach to the entire ITportfolio (applications, infrastructure, etc.) to effectively transform theIT portfolio to enable business improvements while driving out sustaincost Transformation Roadmap - A multi-year transformation plan thatcomprehends all key elements (business, applications, technology,organization and governance) is required to cost effectively transforman IT portfolio IT partner manages the IT transformation – Portfoliotransformation takes time and is most effectively executed by ITvendorsEDS Manufacturing13 Apr 2006page 14 EDS Confidential

EDS has developed a world-class product development architectureblueprint upon which we base transformationsM&SAdaptersTeamcenterIntegrated Product ing OperationsVispriseAdaptersSAPIllustrativePoint entumPatran/NastranAnsysDelmiaEDS ManufacturingD2 MaximoSAPOracleCatiaHoneywellManuguisticsCadence13 Apr 2006Seibelpage 15 EDS ConfidentialMicrosoftEpicor

What is a Framework?Available by industry segment, EDS’ Industry Frameworks are the lens throughwhich we analyze the current state and chart the course to the future state. EDS’Industry Frameworks help chart the path for transformation.Current StateAgile StateLong RangeProduct PlngPerformMarket AnalysisConduct Research& DevelopmentDevelopOperational &ImplementationPlansManage Portfolio& FormulateMarket StrategyExecutivePortalQuality PortalManage EnterpriseIntegrated Product DevelopmentMarket Analysis & Portfolio PlanningRefine Plan &Define Product/ServiceValidate Product/ServiceDesign to RequirementsDesign & ReleaseProduct/Process& ServicePrepare & ValidateProduction EnvironmentProgramPortalSCM ncial SupportProvideAdmin SvcsPrepare & ValidateIn-Service EnvironmentManageBusinessManagePublic AffairsProvide HRSupportProvide rviceAsInventoryAs BuiltDigitalCompetitors GatewayPMOGatewayManufacturing Sales & Aftermarket ServicesPlan and ScheduleProductionSupport ProductionCreate ProductDemandRepair & MaintainProductManage Supply &In-Bound LogisticsManage Finished GoodAnd Out-Bound LogisticsSellProductDiagnose & ManageIncidentsCRMGatewayMROGatewayManage Supply ChainDevelop SupplyBaseIdentifySourcingManage Warehouse& DistributionConduct SupplierAfter MarketManage ProductionSupport & MaterialMake or AssembleProductsIntegrated Industry ModelManufacturing Industry FrameworkDesign AnywhereBuild AnywhereService GloballyA successful framework EDS ManufacturingDESCRIBES what changes are needed.PRESCRIBES how the changes should occur.13 Apr 2006page 16 EDS Confidential