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PTC Takes Next Step in Internet of Things Strategy

Posted By David Brousell, November 17, 2015 at 12:34 PM, in Category: Transformative Technologies

In an article about the emerging Internet of Things in the June 2014 issue of the Manufacturing Leadership Journal, James E. Heppelmann, president and CEO of PTC, wrote that manufacturers could take advantage of the huge potential surrounding the IoT only if they heeded three shifts in value creation – from hardware to software, from products to the cloud, and from products to services.

“These three essential value shifts are creating new sources of competitive advantage, but they also require new skills, infrastructure, cultural norms, and operational models,” Heppelmann wrote. “For manufacturers that transform to meet the demands of a smart, connected world, this combination of software, the cloud, and services will be the crucible of innovation and the basis for differentiation, new business models, and disruption in the future. Those who don’t put their current competitive advantage at risk.”

At the time, Heppelmann didn’t say that the IoT trend would also require that manufacturers’ systems of record, such as the product lifecycle management (PLM) software systems that PTC offers, would also need to undergo dramatic transformation. But today PTC took a major step in that direction with the introduction of a new version of its Windchill PLM product that attempts to leverage the connectivity and information opportunities that are part of IoT.

Windchill 11, introduced at a PTC event in Stuttgart, Germany today, uses PTC’s IoT technology, from its acquisitions of ThingWorx and Aexda, to capture and manage data from smart products. In addition, the new version is designed to expand the accessibility of product data beyond the engineering departments of manufacturing companies, an effort PTC calls “democratization” throughout the manufacturing enterprise.

“Windchill 11 re-sets the table for PLM, “said Brian Shepherd, executive vice president, PLM, at PTC, during a briefing I attended at PTC’s headquarters in Needham, MA, last week. “It bridges the physical and digital worlds.”

What PTC is attempting to do with the new Windchill 11 release is position itself at the intersection of two very consequential, related trends that Heppelmann has written about in the Manufacturing Leadership Journal  (http://bit.ly/1SWpSHf) and subsequently in an article in the Harvard Business Review co-authored with Professor Michael Porter of Harvard University. http://bit.ly/1S27gVo

The first trend is pervasive connectivity via the IoT and the information generation enabled by it. The second is the effect that pervasive connectivity and information availability and management are having on how companies are organized, lead, and managed. These two trends, I believe, are resulting in the transformation of business itself, as flatter organizational structures, more empowered employees, and greater collaborative decision-making alter how companies work.

My sense is that this emerging model is the new "operating system" for business in the 21st century. And the larger context for this is what the Manufacturing Leadership Council calls “Manufacturing 4.0”. http://www.mlawardsz.gilcommunity.com/critical-issues/

Systems of record, such as PLM systems, must align with and help companies take advantage of these trends. With Windchill 11, PTC is attempting that alignment. And it is doing so by incorporating its IoT technology and a host of new and improved functions and features in the Windchill software.

Some of these improvements include role- and task-based applications to broaden PLM data accessibility, the ability to capture and analyze IoT data to understand real-time performance and quality, new Software-as-a-Service and hosted cloud deployment options, and more powerful search capabilities.

It will take time, of course, for any of PTC’s current or prospective customers to adopt and fully employ these new technologies. Not every company is at the same point in their IoT journeys and there are also differences in how well companies absorb and use technologies such as PLM. The Manufacturing Leadership Council’s “Factories of the Future” survey showed earlier this year, for example, that only 12% of manufacturers had “completely integrated” their design and production processes digitally. In the next 5 to 10 years, however, 51% expect to do so.  

Windchill, which was first introduced to the market in 1998, currently has a base of some 1.5 million users spread across 17,000 companies. Only a small percentage of the base today uses PLM via the cloud, for example, but PTC executives at the briefing last week expressed the hope that within 24 months, 30% of new deployments would be based in the cloud.  

But if what’s happening at Medtronic, one of the companies speaking at the briefing, is any indication, the IoT message is beginning to resonate. Joel Hembrock, a senior designer and CAD administrator at Medtronic in Jacksonville, FL, said the medical device manufacturer is “starting to make its products smarter” and wants the benefits of greater shared data.

As Medtronic and others enlist in the IoT “revolution”, as PTC calls it, the broad implications on corporate culture, organization, and leadership – not to mention on other enterprise software systems such as ERP, supply chain and CRM -- will begin to be felt.  Along the way strategies will be devised and revised, small IoT projects will grow into larger projects, achievements will be celebrated and mistakes will be learned from, and manufacturing will progress.

Only this time it may come faster than we think.




Written by David Brousell

Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council

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