Widespread implementation of a new product-lifecycle-management tool will allow Volkswagen AG to streamline its vehicle-development process and cut costs, the software’s supplier says.

“What they’re (VW) trying to do is drive a common (product-development) system and common practices across all brands, instead (of the brands) operating as independent industries,” says Dave Taylor, senior director of automotive marketing-Siemens PLM Software.

Siemens landed the PLM contract following an unusual bidding process, he says.

Typically, potential customers ask for a list of features incorporated into the software.

“VW didn’t do it that way,” Taylor says. “They said, ‘You’ve done it before; you’re the experts. Tell us how we could be using these tools and what the process should look like.’”

VW will roll out Siemens PLM’s Teamcenter software to all subsidiaries, including Audi AG, Bentley Motors Ltd., Bugatti, Automobili Lamborghini SpA, SEAT SA, and Skoda Auto a.s.

Taylor says the software is multifaceted, but at its core it creates “transparency,” meaning VW personnel worldwide have continual access to programs and data from other regions.

Designers and engineers from around the globe virtually can see how parts and vehicles are shaping up early in their development, enabling VW to cut costs by sharing components and platforms worldwide.

“A lot of OEMs are developing a strategy for platform reuse,” Taylor says, adding the software allows auto makers to determine how many vehicle variants can be derived from a single platform and “still have appeal.

“Through this PLM system, (VW) is trying to create an environment for platform sharing to increase reuse and drive costs down,” he says.

Taylor won’t say what the contract is worth to Siemens, but typically auto makers spend millions in implementing a PLM strategy.

It’s an investment VW had to make to remain competitive, says Ed Miller, president of CIMdata Inc., an Ann Arbor, MI-based global consulting and research firm specializing in PLM.

“It’s already a requirement,” Miller says of PLM integration. “Companies not making major investments in this direction will be among the losers in a short number of years.

“This represents a serious priority on the part of VW to make this kind of investment, and it’s consistent with investments by other OEMs around the world,” he adds. “VW’s objective going forward is to implement an overall architecture that enables them to more effectively operate as a global company across multiple brands with the operations and knowledge they need to compete.”

More than just software, Miller says PLM changes the way a company operates and how its employees interact. “It’s a fairly substantial investment, and not just in terms of dollars.”

Since selecting Siemens as its PLM software provider last spring, VW already has employed the application in the development of the Audi A6 and VW Touran. An announcement is pending on two other products that were developed using Teamcenter – one from Skoda and the other from SEAT.

“VW historically has done most of their product development out of a single location,” Taylor says. “Now that they have to meet the needs of a global market, they need people on the ground in different regions that are part of the development process.

“(Teamcenter) allows that global collaboration to happen.”

A number of other auto makers and suppliers are using Siemens PLM applications, including General Motors Corp., Ford Motor Co., Delphi Corp. and Visteon Corp.

Taylor points to GM as evidence of the impact the software can make.

“Some argue GM is probably leading in this area,” he says, pointing to the integration of GM operations in the U.S. with those in Europe, Australia, South Korea and elsewhere. “GM is doing a great job of leveraging vehicle platforms across its different brands. They share better within and between brands on a global basis.”

Teamcenter also allows VW to transmit design data back and forth using a common format called JT.

JT simplifies normally complex computer-aided-design files for easier transmission, regardless of what CAD program is used to create the data. Because the CAD files are converted into a less-complex format, the amount of bandwidth required to transfer them is decreased dramatically.

Prior to the development of PLM software, auto makers traded information among product teams via phone calls, faxes and email, Taylor says. As information exchange became increasingly important, auto makers implemented systems that allowed data to be shared within individual facilities, a method he refers to as the “silo” approach.

“Within a manufacturing plant you’d have a system, but it didn’t connect (with other facilities),” Taylor says.

Siemens now is working on integrating VW’s supplier network into the Teamcenter system.

“Suppliers are an integral part of the (product-development) process, so to try to do something like this and not include suppliers wouldn’t work well,” Taylor says. “We’re trying to figure out how VW wants to implement suppliers into the process.”

It is expected to take several years to fully roll out application of the software, which eventually will be accessible to some 45,000 users.