What Is Product Lifecycle Management (PLM)?
PLM refers to the process that handles a product as it moves through the stages of product life: development and introduction, growth, maturity/stability and decline. PLM is utilised in the strategy and decision-making processes related to your product line. This determines the pricing strategy, marketing and promotions, selling strategy, and plans for expansion and cessation are all based on product lifecycle management. PLM is a very complex process. Here technology plays an important part in creating, capturing, managing and leveraging the products. This helps organisations to maximise their profits.
PLM ensures that product information is available to the right people at the right time. It enables supply chain agility and business continuity. This integrates with many technologies, ERP software being the major one. ERP software integrates all the functions of PLM into one system by connecting information across organisation. This helps to improve the processes of the product lifecycle.
Stages of product lifecycle
There are six stages of a product lifecycle. They are concept, design, production, sales, support and retirement stages. PLM is never linear. Each product has varying paths and timelines for each stage. These are the different stages:
Concept stage
This is the first stage that involves ideation and planning for a new product. The generation of ideas requires a lot of market research. The research and development teams are tasked with identifying customer needs and determining the feasibility of the product. The results of this market research help to decide what kind of product needs to be developed to meet the customer’s needs.
Design stage
In this stage the product is planned, developed and tested. This includes developing product prototypes, improving the design and making sure the product complies with all safety and legal regulations. Businesses have to spend a lot of money on research and development during this design phase.
Production stage
Once the company has tested the prototype and feels confident about its market worthiness, the product goes to the production stage. Manufacturing of the product includes various processes such as sourcing raw materials, assembling components and testing the final product. At this stage the product is final and no changes are made in the design.
Sales stage
A finished product now moves to the sales stage. In this stage, the product is promoted and sold to the customers. Pricing plans, sales promotions and advertising fall under this category. Since a business must estimate how many sales it will make, the sales and production stages frequently happen at the same time.
Support stage
This stage involves providing support to the customers after they have purchased the product. It covers warranties, repairs and customer service. This could also have to do with continuing education or other support services offered to new customers to improve their user experience.
Retirement stage
In this stage, a product is retired in two situations, either it is no longer in demand in the market or competitors have better products. This phase covers the product’s end of life, including recycling, disposal, and repurposing. Successful products are frequently only improved upon in subsequent iterations.
Elements of PLM
Product lifecycle management needs collaboration between departments across the entire product life. It is both a repository for all information that affects a product and a communication process between product stakeholders. PLM focuses on managing data, which begins with product data management. The key elements of the PLM are:
- Manages design and process documents.
- Constructs and controls bill of material records.
- Offers an electronic file repository.
- Comprises document metadata (“attributes”) and built-in and custom parts.
- Finds the material’s composition to ensure environmental compliance.
- Allows task assignments that are item-focused.
- Allows process management and workflow to approve modifications.
- Regulates “electronic signature” and multi-user secured access.
- Data exports for downstream ERP systems.
Benefits of product lifecycle management?
Companies invest in PLM solutions for the benefits they offer. Some of them are as follows:
Improves development, engineering and effectiveness
PLM enables the bidirectional flow of real-time data to support knowledge sharing and collaboration. This helps the engineering team to remove the hurdles in their way and increase efficiency. Other teams are well-informed about the product lifecycle and can make effective decisions.
Reduces errors and save costs
PLM is a cheaper way to rectify the issues that arise in product in the early stages. It also helps to reduce costs due to the reuse of the information. Additionally, it reduces manufacturing waste to provide environmental benefits. It saves costs of prototyping due to a clearer structure of planning and innovating.
Reduces time to market
PLM provides updated information at every stage of the product lifecycle. This helps the project managers to control overlapping timelines and bring the products to the market faster.
Improves project delivery
PLM solutions support advanced workflow management and allow the team to calculate product costs. This helps to effectively manage project delivery, such as the handover of new designs to the manufacturing.
Higher-quality designs and products
PLM gives designers and engineers a deeper insight into the product requirements. This collects data from both internal and external sources and helps the team to better the quality of the designs. It also helps to improve product quality and reliability.
How to measure product lifecycles
Various measurement methods are used by companies to understand when to transition a product from one to the next stage. There are several types of measurement methods, which are as follows:
Sales data
Sales trends of a product are a great way to measure a product’s lifecycle. They indicate the popularity, demand or decline of the product. Sales data assists the company in understanding when to stop production, marketing and offering the product. Cost is an important factor, but many companies only look at the product revenue and ignore expenses.
Customer feedback
Customer feedback provides valuable insights into a product’s lifecycle. Positive feedback in the early stages of the product indicates that it has the potential to grow. On the other hand, negative feedback in the later stages indicates that it is declining. Customers may also point out shortcomings in a product, which helps a company to determine whether a new version of the product can address the unmet demands in the market.
Competitor analysis
Competitor products should be analysed to measure a product’s lifestyle. A product’s lifecycle may be impacted when new ones hit the market and older ones become outdated. A faster, better and cheaper product from a competitor company can make you reevaluate your product.
Quality of output
PLM uses specific metrics such as quality of output, production efficiency or product waste to help the company decide if they still want to offer a product.
Warranty claims/returns
When a company’s products require constant maintenance or malfunctions, it may be time to reconsider the benefits. Interactions with customers regarding returns, unhappy reviews, warranty claims and repair requests can be used to gauge this.
How to manage the product lifecycle?
Product lifecycle management collaborates with all departments across the organisation. Thus, it is very important to ensure communication happens smoothly across all departments. The development department should be in contact with manufacturing and sales to make sure the required resources are available. Similarly, manufacturing and sales should be in contact with other departments to help in the future development of products.
PLM is the process of developing, updating, and launching goods. It covers the product’s production and marketing. This process brings all the sources of information, data and teams to work more collaboratively and efficiently. It is a strategy to safeguard your company’s intellectual property and use it to get a competitive edge as well as process optimisation.
