Product lifecycle management (PLM) is designed to reduce the time it takes for a product to go from design prototyping and production to quality improvements and sales channel distribution in the most efficient way. The product life cycle is broken down into stages and optimised to drive continuous improvement initiatives that are designed to reduce resource requirements and environmental impact while increasing margins.
The key stages in PLM include:
#1: Product Introduction
In this initial PLM stage, your product will generate little money for you because your sales volumes will be low until demand is created and production volumes go up. While your costs are high at the beginning, you’ll have little or no competition at this stage.
At this point, public awareness of your product increases, and this simultaneously increases both your sales volume and your competition within the marketplace. You begin to reap a profit as your operations to reduce waste and costs.
In this stage of product lifecycle management, your overhead and distribution costs are lowered because you’ve scaled up your production volumes and distribution. Even if prices drop because of the competition’s similar products in the marketplace, sales volumes continue to rise as the product is saturated throughout the market.
#4: Saturation and Decline
At the end of the PLM stages, everything decreases: cost, sales volume and profits.
Powering up Processes
Like aging, PLM stages are unavoidable. The key is to get the most out of those early stages of introduction and growth so that the maturity stage grows into maximum revenues.
It all starts with having the right processes supported by the right system.
As you’ve likely observed, processes can be tricky with products and it can take a while to figure out the best practices for your organisation…while you lose money with a few wrong turns. While experience undoubtedly helps, it’s even better if you have the right tools on hand to power up and support your processes from stage 1 of PLM.
That’s where the right enterprise resource planning (ERP) software can make those early growing pains disappear. ERP basically serves as a nerve centre for your product development: it manages inventory, tracks sales, spots inefficiencies, smooths out scheduling and shipping while seamlessly integrating all of these processes. The impact of having the right ERP system breaks down to important moving production parts such as:
- Product information management
- Discrete manufacturing
- Lean manufacturing
- Shop floor control
- Inventory management
- Master planning
- Quality management
- Spotting and eliminating resources waste
- Warehouse management
- Service management
- Employee portal