Every product has its day. A well-designed product that has the right balance between price and value is every company’s goal. Taking that product and constructing a launch strategy that places it in the market at the right time and place is another required element of success. But even the best products, including those we consider staples, have a lifespan…a shelf life…before they need to be retired or overhauled. Just think of how toothpaste, toilet paper, and soap have evolved. Companies that have a strong Product Lifecycle Management (PLM) process in place tend to be the long-term winners over, and over again.
Where did PLM come from and what is it? In 1985, American Motors Company (AMC) was looking for ways to develop and produce highly desired products and get them to market faster than its competitors. This strategy lead to the creation of the Product Lifecycle Management process. The purpose of PLM is to manage all aspects of a product from design concept to retirement, often referred to as “sunsetting”. PLM requires dedicated resources, an owner of the entire process, access to data, research, and all functional organizations within the operation. Companies that do a good job of PLM are typically leading innovators in their respective industries. Can you operate without a formal PLM process in place? That depends on what you’re hoping to accomplish…survival, growth, or perhaps winding down the business.
The PLM team plays a significant role in a company’s success. It is charged with product development, designs, documentation, and data collection. It is also responsible for managing cost-of-production models, workflows, cross-organizational influencing and role assignment. The team establishes launch plans, in addition to reporting metrics to track and monitor each product’s performance in the market…and this is by no means an exhaustive list.
As you can see an effective PLM team requires different talents, skills, and capabilities. The team must have access to every area of the company’s operations – they must be embedded. A typical product-to-manager ratio is no more than two to one. Meaning, depending on scope of product a product manager should never manage more than two products at a time. This requires a significant resource commitment from the company. Placing one person in a position to manage all products is a recipe for failure. Not only is it ineffective for one person to manage multiple products, but it is impossible for that person to have an intimate view of the market, needs, trends, etc across various product lines.
Implementing a PLM process is not easy. It requires time, resources, commitment, and strong leadership. Many companies, especially those that are small in size, or family-run, struggle with understanding the value and importance of having a formal PLM process. To that end, I offer the following list of benefits to having an effective PLM process:
- Shortened product development time. May get you to market before the competition.
- Improves product acceptance in marketplace. Right features, functionality.
- Better quality products produced. Managing entire cycle end-to-end increases total quality.
- Greater resource utilization. Process allows organization to improve efficiency of resources.
- Reduces errors. All steps of PLM are documented, recorded, managed and communicated.
- Provides clear line of sight across entire company. What you do, for whom you do it and why.
- Maintains marketplace relevance. Companies fail for a multitude of reasons. Failure to track buyer trends with a formal PLM process has proven fatal for many companies because without this structured method of gathering data and insights, they cannot respond to market changes in a timely manner.
If your goal is growth you need a PLM. If your goal is innovation you need a PLM. If your goal is to increase profitability you need a PLM. Ultimately, if you want to build a profitable, sustainable, company that provides ongoing value to your customers you need a PLM, and there’s no better time than the present to start.