Will GE and PTC’s joint venture create a ”PLM and manufacturing advantage”?

Bildtext: Jim Heppelmann, PTCs CEO

If there is a weak spot in PTCs product portfolio, its on the shop floor. Manufacturing Execution Systems (MES) have traditionally been the domain of Siemens and Dassault Systèmes along with ERP vendors like SAP, Oracle and Infor.
PTCs CEO, Jim Heppelmann, aims to change that. Until now its mostly been a question of when.
After projects like the launch of Creo and the acquisitions of Integrity (ALM), Servigistics (SLM) and M2M/ThingWorx (IoT), this new partnership with GE represents the next step: "Providing a state of the art PLM-MES integration."

This weeks big story in PLM is that PTC and industry giant GE
(Intelligent Platforms) are forming a joint venture in the
manufacturing area. More precisely its a combination of PTCs PLM
solution Windchill and GEs Proficy, which is a specialized software
application for discrete manufacturing. The idea behind the solution,
called "Proficy + PTC Windchill", is to bridge the gap between product
design and manufacturing in PTC-centric development environments.

This closed-loop process capability is designed to ensure real time
visibility between the key business systems that support engineering
and manufacturing.  Jim Walsh, General Manager, says that the improved
visibiltiy between engineering and manufacturing should help
manufacturers improve plant performance and quality, shorten production
times and reduce – and optimize – work in progress inventories.

Over time this partnership could evolve into more than just
collaboration around shop floor information; it may be the first step
towards an even deeper cooperation between GE and PTC. Such a
collaboration could provide something similar to what Siemens PLM is
working towards with the Industry 4.0 concept - an industrial turnkey
solution for IT-support throughout the entire product development
process, including manufacturing.

Ill give you my take on this below, but first some more background on PTCs strategy.

From the disruptive CAD Pro/Engineer to a market-driven PLM company
While PTC might not be number one in the business, it certainly has
taken many steps to become a worthy contender. From the turn of the
millennium it has gone from a company that lived on the commercial
success of the disruptive technology embodied in Pro/Engineer
(parametric modeling), to becoming the PLM industrys most
market-driven developer.

What started a little cautiously during Heppelmanns predecessor,
Dick Harrisons tenure, has taken on an almost exponential development
curve. A few examples:

• The dramatic move to re-architect the classic CAD solution
  Pro/Engineer into the modern Creo environment, with integrated
  capabilities for parametrics, direct editing and advanced variant
  management.
• The acquisition of ALM (Application Lifecycle Management)
  solution Integrity and the work to integrate it into their PLM
  suite Windchill with the goal of creating an integrated systems
  engineering solution.
• The investment in SLM (Service Lifecycle Management), including
  the acquisition of Servigistics, to provide what Heppleman calls
  "Product as a Service".
• Most recently the venture to create an app platform for
  the Internet of Things (IoT) and M2M software (Machine-to-Machine)
  with the acquisition of ThingWorx.

PTCs full product suite now covers product development, service and IoT aspects, and also manufacturing.
However, digital tools for production control have previously been
somewhat lacking in the case of Windchill. While there has been
significant development work on software like MPMLink and others, focus
has been on manufacturing-related BoM solutions (Bill of Materials)
rather than deep PLM-MES integration.

The new deal: Proficy + PTC Windchill Solution

Heppelmann claims that this new partnership is already offering a more
powerful manufacturing solution; "PTCs customers can today already buy
the new Proficy + PTC Windchill Solution."

He says that the solution has been pushed out quickly to respond to
the pressure for changes in manufacturing, "Transformation is driven by
production digitization and trends like lean streamlining of
operations, and increased regulatory demands on product quality". He
also mentions that manufacturers increasingly recognize the value of
Master Data Management to safeguard the reliability of the data
exchanged between PLM, ERP and MES systems.

GEs Jim Walsh reasoned along the same lines, "Product structures
that were defined by engineering can now accurately become the basis
for manufacturing routings and manufacturings Bill of Materials –
which are then used to manage shop floor activity", he said. He added
that shop floor information such as the as-built Bill of Materials and
non-conformance can then automatically be shared back with the PLM
system to complete the closed loop.

My take on future GE – PTC options
Over the years there have been many speculations around a potential
acquisition of PTC, but so far none have happened. While its too early
to say what the final outcome of this partnership might be, an even
deeper cooperation between GE and PTC is an interesting scenario.

Heres my take on this: Large clean PLM contracts are not easy to
get these days. To be able to compete you have to develop broader and
deeper capabilities than the classic ones. For some time PTC and GE
have watched Siemens PLMs initiative, Industry 4.0, which is based on
just that; to marry IT for product development and production into a
seamless chain of product realization. By joining forces, the two
together can potentially produce a concept that will match Siemens
PLMs (and indeed other stakeholders, like ERP giant SAP) "European"
initiative Industry 4.0.

There are other considerations beyond competition between companies.
National industrial policy initiatives are one, and Industry 4.0 is an
example of this. It has the backing of German Chancellor, Angela Merkel
and top European executives. The goal is to make Germany more
attractive to big industrial producers that previously outsourced
manufacturing and product development to countries like China and
India.

In North America there is a similar initiative; the Smart
Manufacturing Leadership Coalition.  This idea of ??getting outsourced
manufacturing back to America byusing  super-rational production
technologies has the backing of President Obama and a number of
American corporate leaders.

How competitive is the new solution?
So, how competitive is the new joint venture manufacturing
solution? From our perspective, PTC brings a technological edge to the
partnership including the "Product-as-a-Service" concept and the
Internet of Things (M2M included). These technologies can capitalize on
trends that certain analysts, like Gartners Marc Halpern and IDCs
Frank Gens, say are about to reshape the worlds commercial and
consumer markets.
This is something that Jim Walsh appears to be betting on.