Product lifecycle management (PLM) is the process of developing, planning, manufacturing,distributing, marketing, selling and servicing products. PLM is a business discipline thatlooks at products and services at every stage — starting with conception and followingthrough until they’re removed from the marketplace. It helps you control costs,shorten development time and get products to market quickly. Comprehensive enterpriseresource planning software (ERP) is a key component of PLM. It connects disparate teams fromacross your organization and helps employees work toward the same goal — a better,moreefficiently developed, produced and marketed product.
What Is Product Lifecycle Management?
Product lifecycle management is the process of managing how and when products are presentedto the market, from development to growth, maturity and decline. PLM is used to developstrategy and make decisions around your product portfolio. Product lifecycle management isused to determine pricing strategy, marketing and promotions and selling strategy, as wellas expansion and discontinuation plans. It’s a complex process and involves technologyto help you create, capture, manage and leverage your products to help your businessmaximize profits.
PLM strategy is most effective when supported by robust ERP software. Because PLM includeselements of product development, supply chain, customer relationship management (CRM) andmore, software that can integrate these functions into one complete system connects theinformation from across the organization you need to improve processes.
Key Takeaways
- PLM is the process of creating and updating products and bringing them to marketquickly. It includes the manufacturing and marketing of the product.
- PLM brings together disparate sources of information, data and teams to work morecollaboratively and efficiently.
- PLM is a strategy to manage your business’s intellectual assets and leverage themnot only for process improvement, but competitive advantage.
- Enterprise resource planning (ERP) is a key component. It’s used to collect andanalyze data from different areas of your business involved in the creation,manufacturing and distribution of the product.
Product Lifecycle Management Explained
Most products are complex and are made up of many components, or raw materials that alsorequire assembly. The bill of materials (BOM) could be considered the recipe for yourproduct. It explains where materials will be purchased and how products will be puttogether. A common misconception is that the BOM is the entirety of a product’slifecycle. When in reality, it’s an important step in any product’s lifecycle,but there’s more to a product lifecycle. It doesn’t account for other aspectslike design, distribution, salesand more, which is where PLM comes in.
With the help of different ERP modules, such as inventorymanagement and supply chain management, you can centralize information and connect each ofthose other aspects of a product’s lifecycle. The modules help to reduce redundant andlabor-intensive work, provide access to real-time and accurate data and bring everyone fromconceptual design to product engineering and customer relationship management together inone ecosystem. PLM is traditionally used by manufacturers who employ designers, engineers,marketers and others and work with already established products, as well as develop newproducts.
Why Do Companies Need PLM?
Complexity is a major concern for businesses. Between product design, supply chain management, distribution and customerfeedback, this complexity is only growing. And at the same time growing global competitionis driving prices down, regulations are constantly shifting and your business needsquick-to-market, high quality products to turn a profit.
To succeed, consider each step of the process in a product’s lifecycle, how they relateto one another and how to bring together the technology to manage each step of the way.Effective PLM helps organizations capture knowledge proactively, encourages and facilitatesteamwork and provides easy access to knowledge, expertise and information across theorganization to reduce time to launch and accelerate go-to-market.
The Elements of Modern PLM
In addition to inception, design, engineering and manufacturing and other areas, PLMstrategies leverage insight from the marketplace to improve existing products and launch newmerchandise. There are important elements of PLM to consider, including the different stagesof a product’s life cycle. What are the five stages of product life cycle?Implementing information and communication technology, mapping processes, managingproduction methods, improving product innovation and speeding up commercialization.
Implementing information and communication technology (ICT): All ofthe necessary platforms, architecture and standards necessary for PLM make up ICT.The PLM process would not be possible without it and the first step is to break downsilos so data about your products, including design, supply chain information,marketing and sales, are connected and can be accessed in a single location.
Mapping processes: Map all of the people, teams and organizationsneeded in the lifecycle of your products. Identify the skillsets needed for eachstep of the way. List key stakeholders. Laying out the plan for how a new productwill be designed, developed and distributed and making it available to everyoneinvolved helps clear confusion and make PLM effective.
Managing production methods: Manage product development data andprocesses to accelerate time to market while balancing cost, quality and compliance.
Improving product innovation: Build a pipeline of ideas that can bedeveloped into valuable offerings.
Speeding up commercialization: Find sticking points that are slowingdevelopment of new products and place special emphasis on them to speed uptime-to-market. Standardizing parts and processes can help. As can developingrelationships with manufacturing and parts partners.
What Is the Product Lifecycle?
The product lifecycle starts with an idea. That idea undergoes research and market testingand may be made into a product. That product then needs to be marketed and sold andeventually improved upon for new iterations. What are the 4 phases of the product lifecycle? Product development, growth, maturity and decline.
Product development: The first step of the product lifecycle, thisinvolves planning, conceptual design, product and manufacturing engineering andsimulation.
Product growth: The product is released to market. Distributionramps up, along with marketing and sales. Ideally the demand increases. But thatalso means there will be increased competition. This is the early stage of theproduct and you are still working on brand and/or product recognition and marketshare.
Product maturity: Your product is now widely available. You may needto make adjustments to packaging or adjust marketing to appeal to new segments.
Product decline: As competition increases, you may have passed peakdemand. It might be time to develop an exit strategy or reimagine the product toidentify areas for opportunity, including new markets or new iterations that bringimprovements or can inspire more excitement and demand for your product.
Product Lifecycle Examples
Let’s take fictional company Dog Cone through the product lifecycle stages.
Product development: The idea for a new, healthy ice cream treat fordogs leads to the creation of the Dog Cone company. The product is designed, testedand goes through regulatory controls. By aligning all of the teams, from supplychain to manufacturing and marketing, Dog Cone is able to create, source anddistribute the new dog treat efficiently. The product rolls out at just a fewstrategic boutique pet shops in key influencer markets.
Product growth: More pet stores, including chains, begin to carrythe Dog Cone treats. Updated packaging is rolled out and marketing continues to findnew distributors.
Product maturity: New competitors have entered the market withsimilar products, and peak demand is reached. To stay competitive, Dog Coneintroduces new flavors, varying sizes and exciting new packaging.
Product decline: With increasing competition and market saturation,Dog Cone takes lessons learned to expand its business. PLM helps keep the Dog Coneteam aligned. The supply chain benefits from standardizing procurement. Planning,conceptual design, product and manufacturing engineering all benefit from continuouslearning and software integration.
Product Lifecycle Management Stages
Another way of looking at the product lifecycle is beginning, middle and end. By establishingthe processes and clearly communicating each step of the way, you can help coordinateefforts and minimize wasted efforts. Learn more about the three different stages:
Beginning of life: Starting with concepting and development, thisphase includes planning, design and manufacturing engineering. Marketing andpromotion ramp up and the focus of getting product to the consumer starts.
See AlsoDjango vs OdooMiddle of life: Congratulations, your product has been manufacturedand is now being used by your customer. You’ll start to improve production anddistribution processes, gather feedback from consumers and track things likemaintenance rates.
End of life: The market may have become saturated. Or perhaps yourproduct is now obsolete. It’s time to plan your production end to avoidwasting stock. Another option is to examine ways to reinvigorate your productthrough iterations, redesigns or find other ways to stay relevant.
Benefits of Product Lifecycle Management
There is a direct tie between information integrity and the effectiveness of an organization,or its ability to respond to a problem. About half of product development andcommercialization resources are wasted, and a whopping 90% of companies are slow to marketand over budget.
PLM enables your organization to manage the information so that it’s clear, concise andvalid. With accurate data and better collaboration, companies can get product to marketfaster, ramp-up to full production more quickly, capture more market share, price productsaccurately to continue to deepen market penetration and find ideas for new products andfunctionality.
In sum, PLM allows businesses to save money and get to market faster by:
- Managing information all in one place
- Keeping data accurate
- Collaborating more easily
- Getting to full production faster
- Capturing more market share
- Pricing accurately
- Finding new ideas for functionality and product
Challenges in Product Lifecycle Management
In trying to accommodate more complex product development processes, organizations strugglewith disconnected systems, processes and departments, as well as issues with data qualityand frequent engineering change orders. Disparate software systems can drive up costsbecause of inefficiencies and slow product commercialization.
To summarize, some of the biggest PLM challenges include…
- Disconnected systems, processes and departments
- Poor quality data
- Frequent change orders
- Increased inefficiencies with separate tools
To overcome these and other challenges, eliminate data and information silos withcomprehensive ERP software that includes modules for supply chain,manufacturing and other teams. Other helpful tools include setting enterprise-wide metricsand goals and adding end-to-end process owners to decrease handoffs between teams. Gettingtop-level buy-in from the outset can also help with the implementation of new or changingpolicies and software.
Measuring & Evaluating Product Lifecycle Management
One of the benefits of PLM is bringing together traditionally siloed teams to be more unifiedand work toward common goals, financial metrics and other key performance indicators.
Product Lifecycle Management Metrics
Here are some metrics to help measure the effectiveness of your PLM efforts:
Team productivity: Productivity across the board should increasewith better collaboration and information.
Quality of output: Strong PLM reduces process waste and improvesproduct quality including improved first-pass yield, or how many units are producedwithout defects.
Time-to-market efficiency: PLM helps organizations hit productlaunch target dates by standardizing processes and centralizing information toimprove efficiency.
Product development budgets: Improved efficiency with integrated ERPsoftware modules cuts down on labor-intensive processes and make your teams moreefficient. This helps control costs.
Revenue from new products: High quality PLM results in betterquality products that get to market faster, driving up revenue.
Cycle time: Track the time it takes to develop and deploy newproducts. Include everything from design to testing and marketing.
Product life: How long is the product used by customers? Comparethat to historical data and benchmark for future efforts.
Product waste: Examine how much waste is generated per productdeveloped.
Product reliability and warranty claims: How durable are yourproducts? Look at how many are found to be flawed or faulty, and track the number ofwarranty claims per product sold.
History of Product Lifecycle Management
Having a single repository of data to enhance productivity was the aim of the first PLM whenit was created in the American automotive industry in the 1980s. As cars became increasinglycomplex, manufacturing processes and costs were rising, making it difficult for smallerautomakers to stay relevant. American Motor Company, the makers of Jeep, centralized theirdata and computer aided design (CAD) as a first step in creating PLM.
In the automotive industry, a major benefit of having a central repository was that elaborateengineering work could be completed once and used for various models with similarattributes. The whole supply chain benefited from this design because the procurement ofparts could be standardized.
From early roots in managing product data, PLM capabilities have grown to include qualitysystems, sourcing, project and portfolio management, customer resource management, analytics and aftersalesservice.
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Successful PLM With Integrated ERP
PLM is a business strategy to continuously improve products and innovate with new offerings.And it’s supported by a series of integrated software application solutions to addresssingle stages of a product’s lifecycle or connect different functions. Althoughmanufacturing processes are an important emphasis, PLM strategies and software include othermodules, including marketing and sales and portfolio management. Enterprise resource planning software helps you gather,manage, monitor and report all the data necessary for successful PLM. ERP solutions connectinventory and order management, accounting, human resources, CRM and other steps in aproduct’s life cycle in one system for your entire organization.
Product lifecycle management is about connecting teams, information and strategy across theentire life of a product. PLM is a discipline that encourages employees to look at theoverall goals of the product and business, and it’s supported by impactful ERPsoftware that gives them the technology and tools to collaborate, share information and moreefficiently design, develop, source and sell a product. Modern ERP software is vital to theprocess. It reduces manual processes, standardizes data and is the engine that driveseffective PLM.
