Product Lifecycle Management

Stronger customer expectations for innovation and quality, further globalisation in designing and manufacturing products, greater public awareness of environmental impacts boost the management of product lifecycle at the point to become a key element for differentiation among competitors.

Product Lifecycle Management (PLM) is a key process toward innovation

For more than 10 years, part or total outsourcing of product lifecycle has been experimented by big industrials. Now, those companies start understanding the necessity to closely control those processes internally, stressing on:

• Time to Market reduction,
• Clever definition for the “Make or Buy��? strategy in relation with the purchasing department in global context,
• Coordinated actions from R&D and engineering units,
• Security in production transfer (mature products migrating to lower production cost countries).

Previous experiences have sometimes led to commercial fiascos and difficult aftermaths, illustrated by major delays in delivery for complex tech products. Such bad press impacts directly the corporate image and the brand notoriety.

Those constatations pushed the idea to avoid multiplication of functions when creating new products or offers by implementing cross-functional platforms along the product lifecycle. Consequently, purchasing, engineering and R&D need to be strongly implicated from the scratch definition of the marketing department. This can be done for instance during “customer events��? that help to understand and mitigate constraints for each function. A good example can be found with environmental or ergonomic constraints that need to be linked in very upstream phases of design when manufacturing products.

Regarding customer support, replacing a sub-system for the product by adding value for the customer (maintaining his product in good shape at low cost) recommends a modular approach for smooth run. Indeed, such model will develop new perspectives in purchasing departments for direct costs and part or total outsourcing of production in developing countries.

PLM, a new business process focusing on product value

Over the five past years, deeper awareness from industrials has been observed on the necessity to professionally manage lifecycle of products from concept to market retrieval. Indeed, feedback experiences show that major commercial failures or delays are more often due to strategic or structural choices than technologic considerations:

• Over-specifications causing costly development,
• Delay in resources planning caused by poor forecast of provisioning date or by unadapted capacity in the production lines,
• Premature transfer of production to low cost country causing a slump in quality,
• Development of product not taking into account general constraints (quality norms, recycling, competitor product).

Finally, PLM helps a company to capitalize its industrial know-how by standardizing each stage of a product cycle and integrating specific constraints related to the sector of activity. Drugs and paramedical products are for instance placed under heavy FDA (Food and Drugs Administration) standards before any launch on the American market. Regulation not only applies to development of new product or to the audit of test protocols but also on the crisis plan in case of emergency product retrieval.

Constraints artificially prolong lifecycle of products and need to be integrated during upstream phases or risking losing market shares.

Therefore, each major stage of a product life can be sequenced in order to structure and coordinate enterprise resources.

Towards unique and shared Product Master Data

Before implementing any PLM solution – key element for more integrated functions within the company, promise solution providers -, a prior task is to mitigate management of product data:

• A rationalization process of Master Data Management (articles, naming, range of manufacturing …),
• Simplification of master data and sharing rules to accelerate understanding of each function by all collaborators when limiting complex interfaces,
• Centralisation of data, especially in multi-site environment, facilitating information access to all collaborators,
• Certifying, securing and archiving clean data for sensitive data,
• Confidentiality management.

Any PLM and a combined Product Data Management project will work without sponsorship of upstream businesses. Indeed, successful project requires a prior alignment of product master data and quite often necessitates a complete reorganization of associated processes.

Secondly, PLM solutions are designed as a backbone for coordination between ERP by exhorting collaborative modes thanks to specific “product development oriented��? data model. Well-realized, tools will give significant benefit leading to a 30% decrease in the total development and manufacturing cycle of new products.

Best practices and traps to avoid for a successful PLM project

After having integrated upstream business functions, the next stage involves a detailed selection of “on the market��? solutions to make sure business specificities are taking into account.

1. Definition of level ambition for business and IT strategies

Due to its transverse nature and for limiting risks of rejection, common business objectives need to be set and share by all from the top and across operational departments exposing expected benefits (reduction in each sequence of product life). In average, a 30% decrease of the time to market equals a 25% decrease in cost development.

At this point, we will essentially recommend:

• Avoiding any functional redundancies with specific connex systems (PLM, CADO…),
• Definition an integrating strategy with existing ERP, without fundamental review of existing processes,
• Forecasting any risk of technical incompatibility limiting interoperability between existing IS and necessiting costly interfaces.

2. Dedicated change management

Identification of the right sponsor is not easy task due to the cross-functional characterics of such project. However, it’s a crucial element to be accepted by all users for not risking the complete solution rejection. In order to press its use, some inspiring events can be elaborated:

• Launch of a new product with delocalized teams (e.g.: Aeronautics, Automotive, Telecom…),
• Standardization following workshops (document and revising management).

Perspectives of PLM

Regarding the level of ambition (partly determined by competition), an implementation can be gradually implemented in three steps:

• Step 1: Integration of existing functions in PLM: standardization and integration of basic functins in a reduced of scope constitutes a pilot phase for validating added-values and expected results.
• Step 2: Improvement of internal collaboration and control of providers: once the foundations of the IS stabilized, results will be correlated by comparing use of functionalities by internal and external partners. A dedicated team for lobbying, training, controlling respect of guidelines will definitively help to maintain quality over long terms.
• Step 3: Real time interfacing of PLM tools and Supply Chain IS in each sequences of product life: after having ordered profitability studies, priorities needs to be set regarding complexity and length of specific cycles because it will necessitate heavy investments in terms of interfaces and change management.

PLM is a “Must to Have” for company willing to evolve in competitive environment. One key for success is to progressively connect internal systems with external partners in order to involve from scratch the right provider in the development of new product (better exchange of data and expertise based on collaborative model). In order to effectively implement those connections, a commitment of providers to build interoperable system and a support of the company in this task are recommendatory. Doing so, product related data are centralized and provides better chances to perform innovative cycles.

CONCLUSION

Business analysts agree to say that PLM investments stepped up in the rank of the “Big Four��? as ERP, SCM, CRM did in previous years and became one of the fundamental axis for organic growth.

As ERP integrated finance, production and distribution during 90’s, PDM (=Product Data Management), DAO (=Data Acces Object) and CAD (=Computer Assisted Design) are today converging through a single system: PLM. Based in the IS strategy and the heart of corporate strategy, PLM makes organic growth speed up, costs savings easier through process optimization and innovation and finally, on the long run, the improvement of capacity to innovate, develop and replace product becoming a competitive advantage in the market.