Product Lifecycle Management (PLM) is the practice of managing a product throughout its life cycle, encompassing the product concept inception, design, engineering, and manufacturing, and then continues to follow the completed products through installation, servicing, and ultimately proper disposal.
Products requiring the level of control PLM offers tend to be big-ticket items, like vehicles, IT infrastructure, industrial equipment, aircrafts, and boats. Because PLM integrates the complexities between people, data, processes, business systems, product information, and technical specifications related to a product, enterprises have grown reliant on PLM software to systematically track products throughout their development and practical use.
The idea of product lifecycle management (PLM) is not new, however, in large part because of computer advancements, the practice has seen rapid growth in the past 35 years to become a prominent component of many industries. The manufacturer of the Jeep Cherokee, the American Motors Corporation (AMC), pioneered PLM advancements beginning in 1985. Harried by larger competitors, AMC determined it needed change, particularly, it strategized an accelerated product development process was the only way to compete. This meant rethinking the entire process of bringing products from inception to market faster to survive. Their efforts succeeded in launching the sport utility vehicle (SUV) category, and brought other successful models to market, like the Jeep Grand Cherokee.
AMC understood that faster collaboration and communication between its product engineers was key in accelerating the product life cycle, manual workflows proved a bottleneck. To achieve greater collaboration and productivity, AMC deployed the novel computer-aided design (CAD) software systems. A centralized ticketing and resolution system and communication system resolved conflict faster, as well as reducing costly product engineering changes because all drawings and documents were in a central database.
These new methods by AMC focused a spotlight on its efforts, and soon it was acquired by Chrysler. After expanding the new PLM system throughout the company, Chrysler then competed its way to become the auto industry's lowest-cost producer in the mid-1990's. The serious productivity advantage was noticed by others, and in other industries resulting in a clamor to apply these practices. Today, novel technology, like IIoT equipment, continues to play a major role enabling PLM systems to accelerate time-to-market and customer satisfaction.
Product lifecycle management software provides a centralized repository for product data with the explicit aim of bringing new products to market quicker. PLM facilitates this objective by increasing workers' ability to collaborate, retaining complete product documentation, and integrating with other vital software that directly supports products, like Enterprise Resource Planning (ERP) software, Field Service Management (FSM) software, or Computer Aided Drafting (CAD) Software.
Because PLM software makes tracking easier, a product life cycle can also be easily streamlined, interchangeable teams can contribute to the project but with greater collaboration in less time, updates and augmentations can be added later drawing on extensive documentation, and specific products can be tracked to their customers to ensure their intended life cycle.
Product data management (PDM) software manages documents and data associated with products, for example, CAD models and manufacturing and installation instructions. These solutions are akin to document repositories, but their features are also encompassed in larger PLM systems.
Product Life Cycle Management (PLM) software systems are far more encompassing product management systems that follow the product from concept, manufacturing, through to distribution, and eventually disposal. PLM software extends functionality through multiple integrations with packages like ERP, and CRM. PLM automation capabilities can optimize workflows, and digital communication features reduce barriers between different teams including engineers, suppliers, manufacturers, sales and marketing, maintenance, and other teams.
Product Life Cycle Management software provides features for tracking products from inception to disposal. This means recording all personnel involved, the product history and service life, and product documentation. To be considered PLM software, the solution must include:
Life Cycle Management — PLM apps collect data from the product life cycle phases: conception, design, manufacturing, development, installation, maintenance, repair, and proper disposal. Because today's heightened complexity and the sheer number of personnel involved in product engineering is vast, PLM software is considered a cornerstone system for many large organizations. This management component ensures that all involved are accounted for, and that all efforts are chronicled to overcome challenges and bring products to market faster.
Centralized Data Hub — Data hubs focus on collecting and maintaining product specifications, maintenance manuals, product use history, and potentially change management events which record new upgrades.
Automation Tools — Automation tools improve efficiency within the product life cycle. Depending on the application, for example software development, automation test tools can be used to check code much faster than manual testing.
Product lifecycle management software benefits companies that manufacture products, or service assets throughout their useful life. While PLM apps directly improve the management of a product's life through to disposal, it ultimately aims at improving client satisfaction and bringing new products to market faster by improving the efficiency of the product development process. Those benefits include:
The product life cycle is only a model that outlines phases in a product's life. Challenges abound when products are introduced to the market.
First, market cycles are unpredictable, and the life of a product is determined by the unpredictability of market demand. Understanding which phase a product is in using market research can help to mitigate market risks and generate business responses to unpredictable markets.
Second, while the market is unpredictable, manufacturers also must be aware of changes that impact their products, for example, changes in materials pricing. Even if the market accepts a product, a supplier may increase their price and impact your bottom line.
Third, product life cycles are simply a theoretical model, and many products fail to even pass initial development, let alone survive market introduction. Manufacturers and businesses must accept that the product life cycle curve is just a model, not a guarantee, and plan their strategies accordingly.
A familiar definition of product life cycle is the duration when a product is first introduced to customers until it is removed from the market. This definition is generally used by businesses and marketing teams and is divided into 4 broad stages: product introduction, growth, maturity, and decline. This is a customer centric definition, and pegs product maturation to sales; first sales are expected to grow after introduction, then sales will plateau and eventually drop off, signaling the decline of the product. This model is very useful for companies that acquire assets to resale, or do not manufacture themselves. For some business cases this model is an incomplete representation of their products' life cycles.
1. Product introduction to market
2. Product sales growth
3. Product sales maturation or plateau
4. Product sales decline and removal from market
With the inclusion of engineering and product design' contributions, an additional 'development' stage is inserted before the 'introduction to market' stage. The development stage has been heavily expanded on by the software industry due to their needs.
Software companies have cycled through several approaches to development, beginning with the waterfall approach that models the development process in phases: definition, design, development, testing, and eventually final product deployment. Waterfall has a disadvantage of being product focused, whereas the newer Agile method is customer centric. Notoriously, waterfall products are completed without much customer input, deploying only after significant development time.
The adoption of a customer centric approach, and the short development cycles espoused by Agile, allow companies to incorporate customer feedback into their designs more readily. This has been a boon for SaaS products, which have turned product life cycle into a continuous customer feedback loop, incorporating new insights and rolling out updated versions so effortlessly they can make improvements within hours of discovery.
There are other considerations, such as with big-ticket assets requiring long-term service components intent on keeping those assets operational over years, even decades. The product life cycle stages are expanded while remaining within the same "development to disposal" model. During the life of the asset, maintenance and upgrade stages may be inserted, with the expectation that the product will decline when its useful life ends, rather than when the market is done with it. For example, the market may replace fridges with smart fridges, but the nature of cargo ships prefers them to be maintained until they stop floating.
Project life cycle management has applications in a wide cross-section of industries and niches. PLM software helps teams of engineers, developers, technicians, and businesspeople, sometimes in the hundreds or thousands, effectively collaborate on some of the most advanced and complex computer software, hardware, planes, buildings, and consumer goods. Below are three industry applications that demonstrate how PLM software has provided great advantages.
Today, the impact of product lifecycle management can be seen by the number of branded products that continue their foothold on the market, and the number of new products introduced every year. PLM has contributed to the success of brands like American Motor Company, Coca-Cola, and Nintendo.
In response to larger more powerful competitors in the automobile space, the American Motor Company developed their product life cycle management into a competitive advantage with such great success that Chrysler later acquired AMC to absorb those processes, and then later apply them company wide. The strategy by AMC demonstrated that different practices should be applied at separate stages of a product's life dependent on market maturity and doing so would lend more control of product growth. It also demonstrated to other companies that changing company culture around how they view a product's life is a necessary first step.
Coca-Cola's story begins earlier than AMCs but demonstrates how a simple consumer good has transitioned through the market. Within a decade of Coke's launch, Coke distribution reached every state in the U.S. Today, Coke is consumed in nearly every country (not sold in Cuba or North Korea) and is one of the most ubiquitous brands on the planet. Coke's market maturity is so entrenched that it has been commented on by Warren Buffet, saying that if you gave him one billion dollars, he still wouldn't know how to unseat Coke as the top competitor. Needless, the Coca-Cola brand has seemed to match the product life cycle with the greatest success.
Other ubiquitous brands, like Nintendo, have experienced product successes and declines. Nintendo introduced its NES game console in the 1980's almost matching the product life cycle curve, but unlike the entrenchment that Coke has enjoyed for decades, newer technology, such as 16 bit graphics versus the NES's 8 bit graphics, has accelerated the NES's decline. In response to feedback from their PLM, Nintendo began developing its Super Nintendo Entertainment System and eventually introduced it in 1990, 7 years after the NES. Since then, their project life cycle management practices have allowed them to keep pace with technology and steadily introduce new game consoles to the market roughly every 5-6 years.