To inject efficiencies in its engineering processes and to foster new ways of inter-division collaboration, this decentralized, global manufacturer is standardizing PLM technologies and product development practices. It’s secret weapon: A PLM Center of Excellence.

For more than 50-plus years, Emerson has prospered with an organizational chart and infrastructure that’s about as diverse and decentralized as anyone could envision. Over 60 autonomous divisions in 255 locations manufacture everything from consumer-friendly garbage disposals and hand tools to commercial-grade industrial automation and process control systems. The result has been 52 consecutive years of increased dividends, culminating in $24.7 billion in worldwide sales in 2008.

Emerson has established a long historical culture of operating its divisions in an autonomous manner.  Emerson drives strong financial management processes at the divisional level, and provided that each division meets its financial goals, they have traditionally been able to run their operations in an autonomous manner.  Emerson has also focused on keeping corporate allocations very low, so as not to “burden” the divisions with excessive overhead costs.  Within this culture, enterprise standards were not considered a critical component for operations.

Yet the window for maintaining such a highly decentralized organization and culture began to narrow in 2000 when our then incoming CEO began to envision more sustainable growth opportunities resulting from leveraging our scale and embracing common, shared services. Product development and innovation was a key target given the challenges surrounding collaboration on a global scale.  Driven by the CEO’s vision, we set out on a course to adopt a global set of standard product lifecycle management (PLM) technologies and practices in an effort to reduce complexity and increase the efficiency of our engineering processes. Our mission would put us on a track to globalize engineering assets to facilitate a design, source and build anywhere strategy; create one source of the truth for product data; and over time, enable inter-division collaboration on what could potentially be game-changing new product designs.

We started out this journey by standardizing the global divisions on core PLM technology—in this case, Teamcenter from Siemens PLM Software and partner IBM. Yet software standardization is only one piece of the initiative. To ensure consistency across the myriad Emerson divisions and to promote resource and idea sharing between diverse and geographically distributed engineering teams, we needed to go further and identify, create and enforce a common data model in addition to establishing common workflows and best practices around product development and engineering.

PLM COE Gives Engineering a Voice

Using a past ERP roll out as the model, we determined several key entities needed to be in place to ensure success on a global scale. A PLM Project Management Office (PMO) was established to keep the IT deployment and deadlines in check, while executive sponsorship from top management, including the Emerson CEO and chief technical officer, helped ensure buy-in across the global divisions.

One of the most essential elements in our strategy was to create the PLM Center of Excellence (COE), a hands-on group encompassing about 60 members representing each of the engineering disciplines across all of the divisions. Rather than having a corporate body mandate a set of IT standards and business processes around product development, we realized the PLM COE was necessary in a company of our size and diversity. The PLM COE would build consensus and give engineering a voice in establishing the PLM standards it would be required to uphold. It would lead the charge in defining a common data model–for example, a common definition of a part–that was enforced companywide. The group would also formalize standard workflows and best practices around product development to ensure PLM technology was implemented effectively and to erect that critical foundation upon which Emerson will be able to share, collaborate and leverage R&D resources across divisions. Another critical role for the PLM COE: To deliver governance and oversight for the common PLM standards moving forward.

Having the backing of the corporate CIO and CTO was critical for establishing a power base for the PLM COE. Drawing on their network of resources across the globe, the executive sponsors determined who would constitute the COE (typically two representatives from each division, including a lead IT engineering person along with a mid-level engineering manager) in addition to creating an executive steering committee and enlisting participation from critical partners, including IBM and Siemens. Having partners take an active role in the COE is essential to the standards-setting process because it injects external best practices into the mix while also building momentum around establishing repeatable processes.

Appointing a leader for the PLM COE was another key milestone. We created a dual position, soliciting a full-time volunteer from the divisions to hold the post for an 18- to 24-month term, and that individual works in partnership with me.  While we’re into our third COE leader appointment, we learned valuable lessons.   The individual must possess the leadership and political skills that are essential for driving standards. We also learned that the COE lead should hail from the engineering ranks, not corporate management, so they had real-world experience in the processes we were trying to standardize, thus instant credibility with the engineering teams.  Along with these lessons, Emerson also decided it needed to hire a PLM expert from outside the company who would bring immediate vision, senior leadership, experience, passion and credibility.  Someone with been-there-and-done-that-before experience.  This was required to break through the autonomous divisional corporate culture and to put real strength behind the difficult PLM COE “journey”.

The PLM COE meets virtually every month using collaboration software and gets together face-to-face on a quarterly basis. Divisions that have active PLM deployments or are aiming to deploy within 12 months participate in the meetings, which can range from deep dive assessments of data model syntax to discussions on specific PLM workflows around engineering change orders, document release and other core engineering processes. Since each of the divisions operate under a different business model—some have a highly engineered-to-order process while others follow make-to-stock procedures—the PLM COE must negotiate standards that can span all models. The goal of the PLM COE is to produce Level 1 standards that are embraced by all divisions along with Level 2 and Level 3 standards, which are interim processes that fall between each phased gate and can be leveraged depending upon a division’s need. The PLM COE also needs to work six to nine months ahead of the divisions’ PLM needs, recognizing, for example, that integration with ERP systems or electrical CAD packages needs to be incorporated into the business process and data standards.

While there was never any huge cultural resistance to the global standards setting process, the PLM COE did have to contend with apathy among divisions which questioned why they needed to participate. That’s where the executive sponsorship came into play. Both the Emerson CEO and CTO actively took part in communications campaigns that addressed the importance of the PLM standardization effort, including how the divisions would benefit from a quicker return to value on their PLM investments by not having to build things like security models or validation best practices from scratch. Success stories related to the PLM COE are also publicized to underscore the value of the effort to the overall Emerson engineering constituency. And we learned that we needed to have a formal budget for the PLM COE, to cover costs related to travel, teambuilding events and some dedicated full-time staffers.

Today, years into the process, the PLM COE has successfully formalized about a half dozen engineering processes that are embraced and enforced within Emerson divisions around the globe. By taking advantage of our scale and committing to a standard solution, we’ve been able to reduce our PLM software acquisition costs by around 25% and saved around 20% on related service and consulting expenses. Training expenses around PLM technology have been lowered and there’s been about a 25% reduction in labor resources required for a PLM deployment.

Attempting a standardization effort around engineering and product development processes is not for every company. But for those like Emerson, which have multiple lines of business and engineering organizations that don’t operate as a single organization, this is an effective way to commonize processes, open doors to new forms of collaboration and still retain enough flexibility to let diversity flourish.