Manufacturers are looking to drive revenues rather than cut costs, the product is becoming the focus for companies looking to establish dominance in their markets. Just as enterprise resource planning (ERP) consolidated disparate back-office activities into a cohesive environment for running business operations, PLM provides a single system of record about products.

PLM manages, coordinates and optimises the processes, decisions and information about products from initial concept to end-of-life across the extended enterprise, in order to maximise product profitability. PLM is considered a high priority business strategy for profitability, which the PLM technology vendors enable. The main impact of such a business strategy is on revenues, profits, quality, speed and efficiencies, innovation, and compliance. 

The market

The market for PLM solutions is growing at a significant rate. Datamonitor predicts that by 2010 the global market for PLM software will reach $862.6 million. Companies facing regulations that have an immediate impact on the way they take a product to market are now ready to spend on PLM solutions that were not initially budgeted for.

The evolution of PLM

The PLM category has evolved from disparate roots, steeped within the core business challenges faced by specific vertical industries. For example, within the industrial/automotive sector, it had its roots amongst engineering; within the supply chain, across the electronics and high technology sector; regulatory compliance in the medical device/life sciences sector; and it started in receipt and packaging management in the consumer packaged goods/pharmaceutical sector.

In today's world, industry-specific business challenges are coming together as companies strive for a holistic view across the product lifecycle, with the ultimate goal of improved profitability across the extended enterprise. The PLM category has come of age!

Today PLM technology complements CAD and ERP solutions to uniquely address a web of business challenges faced by manufacturers. Where CAD plays an important role providing the technology to design products, and ERP manages the resources linked to manufacturing, PLM, manages product lifecycle processes. By using the product as a system of record, PLM gives companies the visibility and insight to determine which products to bring to market, ensure timely delivery, comply with policies and regulations, service products appropriately, make decisions about a product's life, and effectively manage a product's end of life. With growing recognition of PLM's business-critical role has come a host of new market entrants, ranging from PLM specialists to CAD and ERP companies seeking to extend their functionality.

Approaching PLM technology

With more than 50 PLM solutions on the market, identifying one that will support a true PLM strategy can be challenging. However, it is possible to cut through the confusion by evaluating PLM technology solutions along four primary technology considerations. These factors include the ability to recognise and support the product record as an enterprise system of record, domain expertise, distributed IP management and collaboration, and the enablement of regulatory and standards compliance.

Enterprise product record

Linked to these important technology considerations to support the PLM strategy is the enterprise product record. Companies have built systems to manage discrete operations across their businesses; CRM for customers; ERP for financials; SCM for supply chain and HCM for employees. However, the enterprise product record, is the single system of record for product information required to maximise profitability throughout the lifecycle.

Containing the rich information that uniquely defines all aspects of a product at each stage in its lifecycle, the product record includes all of the information required by the extended enterprise to conceptualise, design, source, build, sell, service and dispose of products. The enterprise product record is where business and market requirements meet product tangibles, such as materials, design and manufacturing methods.

Heritage / domain expertise
 
Bringing a product to market touches upon many functions within an organisation. For that reason, PLM requires domain expertise in such processes as engineering, supply chain management, customer service and support, and regulatory compliance - among others. This domain expertise allows PLM solutions to link to complementary applications, such as ECAD and MCAD, in a meaningful way to support visibility, insight and collaboration. 

Distributed IP management / collaboration

Product design and manufacture continues to be globally outsourced, which makes the product development process virtual, distributed, and increasingly complex. This is very significant when you consider that up to 80% of a product's cost is determined during the initial design stage. Companies need to have the tools to accelerate innovation without compromising engineering creativity or supply chain flexibility. Dispersed product design teams can conduct real-time collaboration on a global basis in order to leverage insight, creativity and core product designs.

Companies need to invest in software that helps them manage, exploit and collaborate with the extended enterprise, whilst protecting and leveraging intellectual property.

Compliance

From semiconductors, to mobile handsets and automobile subcomponents, product lifecycle management (PLM) technology touches many aspects of the day-to-day goods we use and consume. Now, businesses have an added consideration beyond design innovation, first-to-market status, and healthy profit margins: namely, environmental compliance.

Companies adopting PLM technology must be able to tightly control product lifecycle processes to manage regulatory compliance for life science, environmental and safety initiatives. The PLM technology must allow companies to meet the most stringent regulatory requirements in a cost-effective manner to satisfy and comply with European environmental directives, such as Waste Electrical and Electronic Equipment [WEEE] and the EC directive on Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment [RoHS]. The challenge for the business is to adopt a PLM strategy capable of turning regulatory compliance into a competitive advantage.

PLM futures

It's easy to see why PLM is exploding across businesses in various industry sectors, with companies striving for that holistic focus on profitability across the extended enterprise. The influence and impact of PLM has grown, and it has touched many areas of their business. The future will be increasingly about moving beyond holistic product information management, collaboration and integration into decision support/analytics and pervasiveness of the enterprise product record everywhere. There is no doubt that PLM usage will grow and it will continue to climb the boardroom agenda.