"Product Lifecycle Economics" Seen a Must for Manufacturers

Limitations of product lifecycle management, need for agility in global economy will drive PLE adoption, Manufacturing Insights predicts

Limitations of product lifecycle management, need for agility in global economy will drive PLE adoption, Manufacturing Insights predicts

Framingham, MA — June 9, 2005 — To compete in an increasingly globally connected economy, manufacturers must implement product lifecycle economics (PLE), a comprehensive and agile framework to incorporate all product lifecycle phases and supporting optimization of design decisions throughout the product value chain, according to a new report from technology research firm Manufacturing Insights.

In today's market, manufacturers are faced with several critical challenges, including shrinking engineering cycles, reduced margins, changing customer expectations, stiff competition, mounting regulations, and complex and geographically distributed supply chains.

In this environment, Manufacturing Insights writes in its new report, an effective product lifecycle strategy must address a broad range of activities and considerations, as well as encompass all aspects of the product lifecycle, yet current product lifecycle management (PLM) practices fail to meet these needs and address the emerging challenges of today's global economy.

The study, "Product Lifecycle Economics - Needs, Opportunities and Tactics," seeks to educate manufacturers on the next generation of PLM by highlighting the current barriers of traditional PLM strategies and specifically focusing on the five core, shifting business needs that, Manufacturing Insights says, PLE is uniquely suited to address:

  1. Vertical Integration to System Integration: Increased outsourcing of product components demands further integration with external components and systems, forcing manufacturers to redefine interfacing capabilities.

  2. Multinational Operation to Transnational Operation: Suppliers need to be on a common "digital backbone" as companies expand outside traditional boundaries and need to integrate internal and external data from dissimilar systems.

  3. Product Cycles Driven to Market Cycles Driven: Manufacturers must develop a product management process to align their operation with market and customer needs, responding frequently, immediately, and directly.

  4. Mass Marketing to Mass Customization: As manufacturers begin to offer mass customization, they need an effective two-way flow of information throughout a well-organized, highly efficient supply chain.

  5. Stressed Service to Lean Service: OEMs must consider service operations and the impact of design decisions on serviceability early in the design phase to reach the optimal balance between initial and downstream costs.
"Competitive pressures and fast-paced technology changes are driving manufacturing companies, across all sectors, toward shorter design times, design and manufacturing outsourcing, faster order fulfillment and cost reductions, forcing manufacturers to rethink their traditional product development methodologies," said Joe Barkai, program director for product lifecycle strategies at Manufacturing Insights. "To stay competitive, manufacturers must have the capabilities to conduct digital collaboration internally, as well as with external suppliers and business partners, and develop methods for efficient and effective collaboration. Implementing PLE enables these organizations to become leaner, improve their visibility to market and product dynamics, and increase business decision agility."

In addition, Manufacturing Insights asserts that service lifecycle management (SLM) — typically regarded as a follow-up activity outside the scope of PLM — is an integral part of an effective PLE strategy and service goals must be taken into consideration throughout the product design and development.

Also, to create a virtual extended enterprise, Manufacturing Insights calls for a reduction in the internal cross-functional barriers to enable the integration of lifecycle activities from a variety of perspectives.

Additional highlights of the report include a roadmap of the recommended four phases of the PLE maturity spectrum; barriers to effective implementation created by traditional organizational structure and the effects they cause; and a comparison of the traditional PLM and compressed PLE cycles.

Additional Articles of Interest

— When ex-Chrysler chief Thomas T. Stallkamp considers cures for what ails American manufacturing, he chooses not to look inside the four walls of the corporation but to the extended enterprise and the relationships that bind a company to its supply chain partners. Read about Stallkamp's take on the collaboration imperative in "No Company Is an Island," the Executive Memo column in the April/May 2005 issue of Supply & Demand Chain Executive.

— For more information on mid-market companies using product lifecycle management solutions to gain competitive advantage, see "Stuck in the Middle" in the April/May 2004 issue of Supply & Demand Chain Executive.