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Can PLM help manufacturing cope with rising energy prices?

Posted Jun 30, 2008 - 07:10 PM by Chris Kelley

Got a chance this morning to read today's Wall Street Journal cover to cover (3 hour plane flight with accidentally dead PC battery) and ran across an article discussing how skyrocketing energy costs are starting to impact manufacturers.  The gist of the article is as higher energy costs translate in higher transport costs rise, some of basic assumptions used to build manufacturing strategies over the past couple of decades are starting to unravel.  The availability of cheap transport is fundamental to two of the biggest trends in manufacturing: just in time and offshore.  It seems that when it starts to cost twice as much to ship parts and products across the world that some manufacturers are starting to rethink how and where things get made.

As I was reading, I started to think about ways that PLM might be able to help with this problem.  A few of the ideas that I came up with:

  • Make lighter weight components.  This saves both transport and operating costs if the product is mobile.
  • Copy factory setups from one location to another.  One of the big arguments to getting one big factory setup is that you learn faster and can share hose learnings with all lines.  The digital factory aspects of PLM can make this effect work across a distributed set of smaller factories that are optimized for getting the heavier items closer to the end user.
  • Make fixed cost lower component of overall factory cost.  This makes higher labor cost countries more competitive.
  • Componentize design to allow for manufacturing of 'expensive to transport' components closest to destination.  Sort of the same as the second point, but this is more focused on product rather than process design.

Interested to hear what other ideas are out there about how PLM can help deal with >140 bbl oil.  Drop me any ideas in comments.

Chris Kelley's avatar Author Info: Chris Kelley heads up the Partner Program for Siemens PLM Software. When he's not coming up with new ideas, he's hanging out with his family and friends.

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