What is Product Lifecycle Management (PLM)
Product lifecycle management (PLM) refers to the handling of a product as it moves through the typical stages of development, growth, maturity and decline. Effective product life cycle management brings together the many companies, departments and employees involved with the product's production to streamline their activities, with the ultimate goal of producing a product that outperforms its competitors and is highly profitable.
BREAKING DOWN Product Lifecycle Management (PLM)
Sound product lifecycle management has many benefits, such as getting the product to market faster, putting a higher quality product on the market, improving product safety, increasing sales opportunities and reducing errors and waste. Specialized computer software is available to assist with PLM through functions such as document management, design integration and process management.
PLM systems help organizations cope with increasing complexity and engineering challenges of developing new products. They can be considered one of the four cornerstones of a manufacturing corporation's information technology structure. All companies need to manage communications and information with their customers (customer relationship management or CRM), their suppliers and fulfillment (SCM-supply chain), their resources within the enterprise (enterprise resource planning or ERP) and their product planning and development (PLM).
History of Product Lifecycle management
PLM originated with American Motors Corporation (AMC). Looking for a way to speed up its product development process to better compete against its larger competitors in 1985, while lacking the larger budgets of their rivals, AMC decided to place emphasis on bolstering the product lifecycle of its prime products (particularly Jeeps). Following that strategy, after introducing its compact Jeep Cherokee, the vehicle that launched the modern sport utility vehicle (SUV) market, AMC began development of a new model, that later came out as the Jeep Grand Cherokee.
The first part in its quest for faster product development was computer-aided design (CAD) software system that made engineers more productive. The second part in this effort was the new communication system that allowed conflicts to be resolved faster, as well as reducing costly engineering changes because all drawings and documents were in a central database. The product data management was so effective that after AMC was purchased by Chrysler, the system was expanded throughout the enterprise connecting everyone involved in designing and building products. By adopting PLM technology, Chrysler was able to become the auto industry's lowest-cost producer by the mid-1990s.
Other Benefits of Product Lifecycle Management
- Improved product quality and reliability
- Reduced prototyping costs
- More accurate and timely RFQs
- Quick identification of sales opportunities and revenue contributions
- Savings through the re-use of original data
- A framework for product optimization
- Reduced waste
- Improved ability to better manage seasonal fluctuation management
- Improved forecasting to reduce material costs
- Maximize supply chain collaboration