Product Lifecycle Management (PLM)

Product lifecycle management (PLM) refers to the handling of a good as it moves

through the typical stages of its product life: development and introduction,
growth, maturity/stability, and decline. This handling involves both the
manufacturing of the good and the marketing of it. The concept of product life
cycle helps inform business decision-making, from pricing and promotion to
expansion or cost-cutting.

Effective product life cycle management brings together the many companies,
departments, and employees involved with the product's production to streamline
their activities, with the ultimate goal of producing a product that outperforms its
competitors, is highly profitable, and lasts as long at consumer desire and
technology permit. It goes well beyond just setting up a bill of materials.

PLM systems help organizations cope with increasing complexity and engineering
challenges of developing new products. They can be considered one of the four
cornerstones of a manufacturing corporation's information technology structure,
the others being the management of communications with their clients (customer
relationship management or CRM), their dealings with suppliers (supply chain
management or SCM), and their resources within the enterprise (enterprise
resource planning or ERP).

[Important: PLM involves both the manufacturing of the good and the
marketing of it.]

Identifying which stage of its life cycle a product is in determines how it will be

marketed. For example, a new product (one in the introduction stage) needs to be
explained, while a mature product needs to be differentiated. PLM can affect more
fundamental elements of a product, too. Even after it reaches maturity, a product
can still grow—especially if it is updated or augmented in some way.

Benefits of Product Lifecycle Management

Sound product lifecycle management has many benefits, such as getting the
product to market faster, putting a higher quality product on the market, improving
product safety, increasing sales opportunities, and reducing errors and waste.
Specialized computer software is available to assist with PLM through functions
such as document management, design integration, and process management.
Other benefits include:

 Improved product quality and reliability

 Reduced prototyping costs
 More accurate and timely requests for quote (RFQ) (solicitations from
suppliers)
 Quick identification of sales opportunities and revenue contributions
 Savings through the re-use of original data
 A framework for product optimization
 Reduced waste
 Improved ability to better manage seasonal fluctuation management
 Improved forecasting to reduce material costs
 Maximized supply chain collaboration


A History of Product Lifecycle Management (PLM)

The concept of a product having stages of life (and the need to manage them) arose
as early as 1931. Around 1957, an employee of Booz, Allen and Hamilton, the
advertising agency, theorized a five-step life cycle for goods, beginning with the
introduction phase, rising through growth and maturity, and eventually hitting
saturation and decline.

Eventually, PLM developed as a manufacturing and marketing tool for businesses

seeking to maximize the advantage of bringing new products to the market first.

One of the first recorded applications of modern PLM occurred with American
Motors Corporation (AMC) in 1985. Looking for a way to speed up its product
development process to better compete against its larger competitors in 1985—
while lacking their larger budgets—AMC decided to place emphasis on bolstering
the product lifecycle of its prime products (particularly Jeeps). Following that
strategy, after introducing its compact Jeep Cherokee, the vehicle that launched the
modern sport utility vehicle (SUV) market, AMC began development of a new
model, that eventually debuted as the Jeep Grand Cherokee.
In industry, product lifecycle management (PLM) is the process of managing the
entire lifecycle of a product from inception, through engineering design and
manufacture, to service and disposal of manufactured products. PLM integrates
people, data, processes and business systems and provides a product information
backbone for companies and their extended enterprise.

The inspiration for the burgeoning business process now known as PLM came
from American Motors Corporation (AMC). The automaker was looking for a way
to speed up its product development process to compete better against its larger
competitors in 1985, according to François Castaing, Vice President for Product
Engineering and Development.  Lacking the "massive budgets of General Motors,
Ford, and foreign competitors … AMC placed R&D emphasis on bolstering the
product life cycle of its prime products (particularly Jeeps)." After introducing its
compact Jeep Cherokee (XJ), the vehicle that launched the modern sport utility
vehicle (SUV) market, AMC began development of a new model, that later came
out as the Jeep Grand Cherokee. The first part in its quest for faster product
development was computer-aided design (CAD) software system that made
engineers more productive.  The second part in this effort was the new
communication system that allowed conflicts to be resolved faster, as well as
reducing costly engineering changes because all drawings and documents were in a
central database.  The product data management was so effective that after AMC
was purchased by Chrysler, the system was expanded throughout the enterprise
connecting everyone involved in designing and building products. While an early
adopter of PLM technology, Chrysler was able to become the auto industry's
lowest-cost producer, recording development costs that were half of the industry
average by the mid-1990s.
During 1982-83, Rockwell International developed initial concepts of PDM and
PLM for the B-1B bomber program. The system called Engineering Data System
(EDS) was augmented to interface with Computer vision and CADAM systems to
track part configurations and lifecycle of components and assemblies. Computer
vision later released implementing only the PDM aspects as the lifecycle model
was specific to Rockwell and aerospace needs.

PLM systems help organizations in coping with the increasing complexity and
engineering challenges of developing new products for the global competitive
markets.
Product lifecycle management (PLM) should be distinguished from 'product life-
cycle management (marketing)' (PLCM). PLM describes the engineering aspect of
a product, from managing descriptions and properties of a product through its
development and useful life; whereas, PLCM refers to the commercial
management of life of a product in the business market with respect to costs and
sales measures.
Product lifecycle management can be considered one of the four cornerstones of a
manufacturing corporation's information technology structure. All companies need
to manage communications and information with their customers (CRM-customer
relationship management), their suppliers and fulfillment (SCM-supply chain
management), their resources within the enterprise (ERP-enterprise resource
planning) and their product planning and development (PLM).
One form of PLM is called people-centric PLM. While traditional PLM tools have
been deployed only on release or during the release phase, people-centric PLM
targets the design phase.
As of 2009, ICT development (EU-funded PROMISE project 2004–2008) has
allowed PLM to extend beyond traditional PLM and integrate sensor data and real
time 'lifecycle event data' into PLM, as well as allowing this information to be
made available to different players in the total lifecycle of an individual product
(closing the information loop). This has resulted in the extension of PLM
into closed-loop lifecycle management (CL2M).
Product Lifecycle Management (PLM)

The business environment is rapidly changing and becoming extremely

competitive. Organizations can no longer afford to take a lot of time to develop and
introduce their products to the market. Also in line with the various business
processes, which too are getting more complex with time, the products are also
evolving and getting more advanced. This has created a need for the businesses to
have a better operational model to support the product development, precisely
because in its absence, it will be challenging for the businesses to manage all the
different aspects of creating a new product. And in such scenario, product
development will inevitably run late and exceed its budget.

The need of the hour for the organizations is to make the product development
process more transparent and improve the efficiencies. This will lead to more
innovations, shorter product development cycles, and faster time-to-market, among
other things. And what helps them in achieving all this? A PLM system.
PLM Definition
Product lifecycle management (PLM) can be defined as the process of managing
the entire lifecycle of a product — right from its inception, through design and
production, to disposal of the final product and subsequent service. A PLM system
thus can be defined as a tool that provides control of the product record across all
development stages such as conception, designing, and production. Using a PLM
system, a company can manage entire product data, including items, bill of
materials, and product files. Such a system also enables a company to track any
changes to product information and communicate revisions to the supply chain.
With a PLM system in place, organizations can manage key product decisions like
real-time product changes. The system also helps to consolidate, organize and track
complete product data — which is otherwise scattered throughout a wide variety of
organizational departments — in a centralized location. By capturing the product
data in a PLM system, manufacturers have access to the single and the correct
version of their product record at any point in time.
In a nutshell, PLM integrates all the organizational data, processes, resources, and
systems in order to provide a product information backbone for the organization. It
can essentially be broken down into the following stages:
o Beginning of life (BOL), which involves new product development and
design processes.
o Middle of life (MOL), which includes collaboration with suppliers, product
information management (PIM) and warranty management.
o End of life (EOL), which includes strategies for how the products will be
discontinued or recycled.

Benefits of PLM
o Development of customer-centric products
o Competitive pricing, traceability and better quality
o New market development
o Shorter time to market
o Lower product cost
o Lower lifecycle cost
o Increased productivity
o Accelerated revenue growth
o Development of innovative products
o Reduced compliance risks
o Waste reduction
o Improved efficiencies
A PLM system can help an organization efficiently manage their product’s
lifecycle by providing a data repository for all the information that affects the
product. It can be used to automate the management of product-related data and
integrate the data with other business processes such as an ERP software. It works
on the lean philosophy and its objectives are to eliminate waste and improve
efficiency.

PLM & ERP

An ERP and a PLM system go well together, acting as collaborative tools that can
communicate with each other and support the various distinct needs of a business.
The basic difference between the two interchangeable systems lies in the names;
while PLM is product-specific, more focused on the creation of a product or the
product line in particular, ERP is enterprise-specific and has a broader scope,
which involves gathering information and tracking a business’s resources
throughout a year/cycle. PLM focuses on managing the development of the
product, while ERP intends to manage the resource planning for production. A
PLM system stores the initial product data such as product design, and once it is
ready to be produced, the ERP system, integrated with the PLM, comes into play in
order to manage the resources.
According to a CIM Data report, a PLM—ERP integration across the enterprise
can result in:
o 75% reduction in terms of time, cost, and efforts associated with entering
data from one system to the other.
o 75% reduction in the BOM-error cost, since BOMs are created only once
and then managed consistently across both the PLM and ERP systems.
o 15% reduction in inventory cost, since designers and engineers are aware of
which components are already on hand.
o An 8% reduction in scrap generated.
Since PLM manages product development, and ERP aims to manage the resource
planning for production, it only makes sense to use these tools in sequential order.
But if the sequence is not followed and ERP software is implemented before a
PLM, the risk of submitting inaccurate product data to an ERP system, inefficient
spending, product recalls, and violating compliance regulations gets high. By
integrating ERP software with PLM, the most up-to-date product data is available
at any time and can be shared with the necessary departments to ensure accurate
financial planning. Thus, both an ERP system, and a PLM system, is critical
components in a company’s growth and ability to innovate.