Even a cursory look at the differences between companies such as Apple and Dell shows that product innovation is just as important as an effective supply chain, excellent customer service, and a fully motivated workforce to succeed in business.
This is illustrated by the fact that Apple`s stock has outperformed Dell`s by more than 200% in the past year with Apple concentrating on product innovation, while Dell has preferred to hone its supply chain.
Like Apple, many companies are seeing the value of investing in software technology to streamline and accelerate the process of new product development and introduction. High customer expectations are driving shorter lead times and product lifecycles.
Product lifecycle management (PLM), or the process of managing information about a product from the time it is conceived, through its sale, use and eventual redundancy, is vital in fast-paced business environments. In essence, PLM is a strategic business approach that applies software tools to support the collaborative creation, management, dissemination and use of product definition information.
Using PLM software, product engineers can collaborate on designs, source components and build a product that is ready for the market. It is worth noting that around 80% of supply chain costs are determined in the design phase of a product`s definition.
Some organisations are using PLM to manage the lifecycle of long-life assets, including utility distribution networks for power, telecommunications and water, or facilities such as plants, drilling rigs, airports and civil engineering projects.
PLM is not technology, but a business approach to solving the problem of managing the information that defines a product.
Ashley Ellington, MD of Softline Enterprise.
In the retail sector, companies are using PLM to improve the return on their own-brand products. It can also help them create a more reliable source of supply, reduce inventory and improve stock control.
Today`s PLM applications deliver improved visibility, tracking and accountability. They allow retailers to collaborate more effectively with manufacturers throughout the design and procurement process to develop products that exactly match desired specifications at an accelerated pace. The result is a faster response to consumer demand by automating manual activities.
Early adopters are achieving significant lead-time reductions of up to 20% across the design and procurement process. Retailers willing to rethink their processes have achieved even more dramatic reduction in lead times of up to 15 days.
Products can also be services. Financial service clients are adopting new product development disciplines for loans, insurance policies and savings packages and are looking for software to help.
PLM is not technology, but a business approach to solving the problem of managing the information that defines a product. It also involves creating that information in the first place and disseminating and using it throughout the lifecycle of the product.
Without software to automate key processes, however, PLM is often a clumsy manual process. The symptoms of that approach are clear. Lots of faxes, people waiting for files to download and an ever-growing number of frantic phone calls as production volumes begin to ramp up and problems are uncovered.
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