Step by step solution to develop and implement Product Life Cycle Management (PLM)

Global product development and support capabilities have become a key differentiator of corporate financial performance. Innovation and product develop is becoming now accepted as a core business discipline.

This article discusses the challenges and offers a step-by-step process to implement best practice Product Life Cycle Management (PLM).

Understanding PLM

Product Lifecycle Management (PLM) is a strategic corporate asset, a cross-functional, enterprise discipline that augments innovation, drives revenue growth and operational efficiencies.

PLM includes product strategy, portfolio and product management. It covers all activities from idea generation; requirements gathering; product design, engineering, validation & compliance, costing quality, direct material sourcing, manufacturing, after-market services and product retirement.

Various capabilities support PLM including: product structure & reuse; part & intellectual property management; engineering changes; state-gate approvals; software configurations; quality tests & defects; product costs; development project status; design and scientific tools; analytics. The focus is on effectiveness, efficiency and innovation.

Complexity results in wasted effort & resources

Large companies make substantial investments within the PLM process, but half of the spending is wasted on products & output that do not meet market needs or timing. Lack of central coordination, prioritization and integration of processes, systems, data and people results in a substantial number of non-value adding activities & tasks and effectiveness & efficiency drags.

Working with various PLM vendors across capability areas further increases complexity.

Understand client needs and innovate

-          Use understanding of consumer behavior and customer needs as starting point in order to enhance product portfolio and reduce complexity

-          Assess the potential innovation opportunities constantly. Synthesize customer insights, emerging technologies and leveraging own core competencies.

-          Focus on the features that the client really wants/ is willing or able to pay for

-          Practice frugal innovation principles for developing, but also developed markets

-          Re-focus innovation resources on challenges that matter

Design plays a key role

Design plays a pivotal role, as up to 80 percent of product’s cost, quality and client perceived value is locked during the design phase.

Shockingly, currently about half of R&D spending is wasted. The R&D project portfolio must be aligned to more understood market demand and capacity to deliver better sized in order to achieve improved time to market and greater “hit rate” of products.

There are many design types & techniques that should be integrated into an overall Design Practice:

-          Design for sourcing

-          Design for engineering

-          Design for manufacturing

-          Design for dismantling, recycling and zero waste

-          Design for use/ life span

-          Design for serviceability

o   Ease of servicing and reachability (from technician or repair person standpoint)

-          Design for the environment

-          Design for overall Sustainability (including Carbon footprint/ GHG emissions)

Various design & development activities (styling & industrial, mechanical, electrical, integrated circuit engineering, artwork & packing design; software development and technology research) needed to support a company’ portfolio of offerings, increase complexity.

Reduce product complexity

-          Understand the problem

o   Direct materials and components make up 60 to 80 percent of product costs

o   Component fragmentation and limited reuse drives up costs by 10 to 15 percent and increases component count by 30 to 70 percent.

o   It negatively impacts product cost flexibility and speed-to-market

-          Conduct fragmentation assessments; component parametric and substitutability analysis

-          Consolidate global sourcing and supplier management

-          Implement governance and component standardization metrics

-          Simplify Service BOMs

-          Implement end-to-end part standardization

Improve operational efficiency

-          Eliminate bottlenecks capacity constraints and delays.

-          Complexity and costs created in the supply chain must be justified by the revenue generation

Use standard methodologies and tools

-          Lean Six Sigma

-          Value Engineering methods (you may refer to a related article in my blog section)

-          Examples : SAP/ PLM, Oracle/ Agile, Siemens/ TeamCenter, PTC, Dassault Systems

4 key steps to develop and implement PLM

1)      Create an enterprise-wide framework to define the organization’s PLM capabilities.

a.       Define what is and is not PLM

b.      Review all processes, applications, metrics, organization and data that underpin product development process follow (from initial concept to product retirement)

c.       Examine the performance and maturity of each across all organizational entities and competencies.

d.      Connect all corners of the PLM landscape with each other

e.      Determine about 15 to 30 Level 1 capabilities and break further down into Level 2 and 3 (capabilities will increase on each lower level as covering business more in detail)

f.        Companies will be surprise of how disjointed and fragmented their overall PLM approaches are, how many gaps & redundancies exist and little, few metrics & documentation support their PLM activities.

2)      Link the PLM framework capabilities to key corporate and product priorities

a.       Use 5 to 10 business metrics to link; and also to track the effectiveness & efficiency of innovation and product development outputs.

                                                               i.      The metrics should transcend any one department or function and link causes to effect.

3)      Link new enterprise PLM framework to corporate priorities and use as ongoing PLM planning tool

a.       Deconstructing the organization’s PLM capabilities serves as powerful tool for ongoing planning activities

b.      It enables the many, disjointed constituents to have a meaningful dialog about trade-offs, PD investment decisions

c.       It helps measure impacts of projects over time against key metrics.

4)      Establish/ empower group to own, review and update the PLM framework and corporate road map.

a.       Unambiguous, unwavering and visible senior executive sponsorship is necessary to ensure that PLM becomes part of company’s innovation fabric rather than a one-time project or program.

 

Special thanks to Kevin Prendeville, Managing Director – Accenture Product Lifecycle Services, Global and North America, for some of his publications & content.


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