Global Enabled Supply Chain Series: Product Lifecycle Management

[From iSource Business, October/November 2002] Collaboration and information are key, and for PLM they are especially key to streamlining production processes, improving design and retaining customers. It's the latest way to tame your supply chain.

"Our organization's supply chain is more and more enabled with today's technology," says an iSource Business reader. "So, what's next?"

Answers to this question often depend on what analyst is doing the talking. However, it's notable that an often-used response to that question in this more realistic economic environment has become product lifecycle management (PLM).

Indeed, if companies live or die by the market value, timeliness, quality and sustainability of the products they produce then the highest priority for a competitive organization is the effective management of its products and services.

According to AMR Research, the PLM market in 2002 should cap off at a 31 percent expansion rate. "You're seeing a healthy, growing market [in PLM] because it's early and very important," says Kevin O'Marah, research analyst for AMR Research in Boston.

O'Marah contends that PLM is not in a "hot" growth phase, but rather it is "hot" in terms of the competitive and supportive nature of the technology. "PLM does not lend itself to wall-to-wall roll-outs," says O'Marah. "However, it is a software market with lots of user interest and plenty of worthwhile technology."

But PLM, unlike other emerging applications, has taken longer to catch on. As a technology, clear executive ownership is lacking in most manufacturing companies. By its nature, PLM thrives in a very cross-functional environment. "It's partially engineering, it's partially manufacturing, it's partially sales and marketing, it's partially R&D [research and development]," explains O'Marah.

"So there isn't a nice clean, executive owner, like a vice president of procurement, who normally would have bought a procurement application to support his procurement initiative. As a result, it's a bit harder to find the owner who can lead the charge to apply this particular technology."

Nevertheless, the software players supporting this market have not been daunted by this challenge. They realize that the key functional leaders must first be enlightened on the subject, which can be a challenge since even the various functional areas within the same manufacturing company will give you more than one definition to explain PLM. Most analysts boil it down to "a strategy with the goal of building a seamless, electronic-based process for managing the different phases of the lifecycle of a product, from concept to design to manufacturing to maintenance of the product in the aftermarket environment," says Jack Maynard, research director of Collaborative Business Solutions for the Aberdeen Group in Boston.

Today, PLM allows companies to go beyond simple computer-aided design (CAD) and build out a management process on behalf of the entire life of a product.

In Maynard's latest report on PLM, which is the fifth in a series, he pointed out that, "A manufacturer's core business is all about building product and establishing brand." He further added that, originally, "precious few of the high-flying market participants focused the available technology on addressing core business inhibitors and production accelerators needed in today's manufacturers to do what they do design and build products in a more streamlined and efficient manner."

Now, nearly two years later, he sees the software players in this area improving on their offering.

A Maturing Market

"The engineering and design segment of the PLM market is doing better than the PLM market in general," asserts Maynard. "But as PLM providers apply robust technology to core business practices in product lifecycle management the offerings can only get better."

Maynard points out that product lifecycle management is a 20-year-old term, but the software market serving this management process is much newer. "And the biggest struggle is being able to extend beyond the enterprise."