Power behind software: License management unlocks the value of embedded software in high-tech devices

Device manufacturers across a range of industries can capitalize on the opportunity to streamline and improve their manufacturing processes by effectively using software licensing to configure different sets of capabilities or capacity on a smaller set of standard hardware platforms.<br/>

03/17/2009



There is no question manufacturers face tremendous pressure to contain costs while innovating and delivering successful products to market. For device manufacturers—particularly those in high-tech sectors such as telecom, test & measurement, medical device, and industrial automation—the ability to flexibly configure products based on embedded software is a compelling option that meets both sides of the “Do more with less” challenge.

From a cost perspective, configuring embedded software reduces inventory burden and allows field upgrades. Product innovation also is accelerated, as a small number of device SKUs can be customized to address a wider range of customer needs and deliver revenue more quickly.

While the high-tech device industry is focusing more attention on how it manages, communicates, and tracks customers’ software usage, some approaches will not be effective for the long term. Often companies first try to add licensing and entitlement information to an ERP or CRM system, but find scaling and updating on a timely basis is a challenge.

A dedicated software entitlement/license management solution will eliminate costly manual processes by making it easy to oversee entitlements, flexibly license products, deliver software electronically, and monitor compliance.

Entitlement management also yields these benefits:

• Measurable, accurate information;

• Increased visibility into channel sales;

• Reduced potential for product failure; and

• More opportunity to try new business models without substantial risk.

Simplified by software

Device manufacturers across a range of industries can capitalize on the opportunity to streamline and improve their manufacturing processes by effectively using software licensing to configure different sets of capabilities or capacity on a smaller set of standard hardware platforms.

Case-in-point is HVAC controls and instruments maker Siemens Building Technologies , which faces enormous complexity in manufacturing and inventory management. In fact, one of the company’s top hardware platforms has 12 hardware variations and 40 firmware variations, creating 480 SKUs for a single product line.

It’s one reason why Siemens chose to simplify the number of models and customize products based on software, which enhances manufacturing processes and provides better service by making upgrades remotely.

“In the U.S., the challenging economy has had a big impact on the construction industry, which directly affects us,” says Duane Keenan, manager of integrated solutions for Siemens Building Technologies. “Before, to change capability in a deployed unit, we had to physically remove the old unit and put in a new one. Now that can be remotely enabled.”

By selecting a licensing and entitlement solution specifically designed for high-tech device manufacturers, Siemens Building Technologies reduced the number of physical models from hundreds of SKUs to just a few. And cycle times were cut from weeks to days since systems can now be customized in the field.

Faster velocity and greater flexibility have created a strong competitive advantage, and simplified the license fulfillment process. Siemens initiated a simple three-step process to create licenses on-demand, integrating directly with its SAP order-entry system. This is in sharp contrast to the two week-plus turnaround time that previous ordering and manufacturing processes required.

“Our inventory costs have dropped,” says Keenan. “It’s not just the physical components themselves—it’s the time required to manage everything.”

Merchandise returns also decreased.

“Due to the high number of variations within each of three major project lines, the previous ordering process—due to the number of hardware variations—lent itself to making specification errors that resulted in returned merchandise that had to be restocked,” Keenan explains.

Other device manufacturers in the telecom, networking, and medical industries are looking for ways to simplify manufacturing and supply chain management through software. A tailored approach to licensing, pricing, and packaging models around embedded software reduces manufacturing costs and streamlines the supply chain by decreasing the number of unique physical devices while ensuring they are meeting individual customer needs and an ongoing upgrade path.




About the author :
Roger Bottum is a senior vice president for Acresso , a provider of electronic licensing services and software asset management technologies to business software markets.









No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
World-class manufacturing: A recipe for success: Finding the right mix for a salad dressing line; 2015 Salary Survey: Manufacturing slump dims enthusiasm
2015 Top Plant: Phoenix Contact, Middletown, Pa.; 2015 Best Practices: Automation, Electrical Safety, Electrical Systems, Pneumatics, Material Handling, Mechanical Systems
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Getting ready for industrial IoT; Visualizing the (applied) automation continuum; Preventing VFD faults and failures; Using wireless for closed-loop applications
Migrating industrial networks; Tracking HMI advances; Making the right automation changes
Understanding transfer switch operation; Coordinating protective devices; Analyzing NEC 2014 changes; Cooling data centers

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.