Product lifecycle management is a strategic approach that helps businesses effectively manage the entire lifecycle of a product. It encompasses activities from conception to disposal, aiming to ensure efficient collaboration, streamlined processes, and improved product quality.
Every day we observe loads of products getting launched in the market. While some of these products are successful, the rest may fail to make an impact.
Alternatively, if the product succeeds and sells quicker than expected, the company's ability to handle sales pick-up could be hindered. Such situations demand effective product lifecycle management (PLM).
You may wonder what PLM is and why it is relevant to you. This article will answer all your questions about efficient product lifecycle management, the benefits of product lifecycle management for consumer goods, and the challenges in PLM.
What Is Product Lifecycle Management (PLM)?
Product lifecycle management refers to the management and supervision of a product across various stages of its lifecycle from creation to processing, finishing, testing, sales, and customer service. It starts from the introduction phase to the declining phase of the product. When it comes to knowing what is product lifecycle management, you must know about all the factors such as introducing, growing, maturing, stabilizing, and declining. These factors are considered to be part of the ongoing cycle from when a product is manufactured until it is released for marketing.
A thorough understanding of product life cycle inventory management is essential for making better decisions and gaining organizational efficiency.
Understanding Product Lifecycle Management (PLM)
The product life cycle process entails bringing together various companies, departments, and employees to develop a robust product that stands out from competitors and is able to fulfill consumer needs. It goes above and beyond the bill of material (BOM) scope. As part of the PLM process, there are different stages involved:
- Conceptualization
- The validation process
- The planning process
- Development and design
- Introducing
- Finding the right market fit
- Retaining saturation
- Keeping, Killing, and Rebooting
To develop new products successfully, an organization must understand what product lifecycle management is and what stages it involves. It will also be easier for a company to market its products if it can determine the product's lifecycle stage.
Product lifecycle management aims to ensure that a company's products are of the highest quality, most profitable, and most impactful on its customers. It has the following functions:
- Managing product documentation, such as design blueprints and the bill of material.
- Documentation and storage of project data.
- Identifying specific workflows and streamlining them.
- Identifying and assigning team members' tasks.
- Information access control for different products
Software for product lifecycle management provides businesses with robust tools and features to effectively oversee and control all the above stages of a product's life. It enables seamless collaboration, data integration, and real-time insights, empowering organizations to make informed decisions and enhance overall product quality.
With advanced functionalities like product data management, workflow automation, and analytics, this software maximizes efficiency and drives innovation in the dynamic field of product management.
Benefits of Product Lifecycle Management
Product lifecycle management is a strategy that helps organizations manage the entire product life cycle, from conceptualization to production and commercialization. By addressing the product's lifecycle effectively, organizations can enhance product quality, cut costs, and accelerate time to market.
While businesses look into what product lifecycle management is, they can consider the numerous advantages of the product life cycle, such as:
Enhancing Product Quality
PLM assists businesses in recognizing and resolving issues throughout the development process.
Reduced Costs
Product management lifecycle can assist organizations in streamlining processes and cutting waste throughout the product development cycle. Furthermore, it helps companies avoid costly errors by detecting potential issues early in the design phase.
Faster Time-to-Market
By centrally managing all aspects of product development in the supply chain, organizations can expedite the time to market for new products. Furthermore, the product management lifecycle assists companies in bringing items into production faster by eliminating rework and delays caused by inefficient processes.
Challenges in Product Lifecycle Management
The PLM model encompasses balancing conflicting stakeholder demands while ensuring the end customer is delivered value. Let's go through each of the product life cycle management challenges carefully to implement PLM strategies that work.
Defining the product life cycle
There is no one-size-fits-all answer to this challenge, as the ideal product lifecycle will vary depending on the specific product and industry. However, having a clear and well-defined product lifecycle is vital to ensure that all stakeholders know their roles and responsibilities. Software for product management lifecycle can facilitate this and improve collaboration.
Managing stakeholder expectations
Different stakeholders will have competing desires and expectations as products move through their life cycles. For example, marketing may want to focus on short-term sales goals, while engineering may be more concerned with long-term reliability. Product managers must strike a balance between these competing interests while still delivering value to the end customer.
Ensuring quality
Quality is often an afterthought in product development, but it is essential to consider throughout the entire lifecycle. Once a product has been released, fixing quality issues can be complicated and expensive. Therefore, building quality into the product from the beginning and monitoring it continuously throughout the lifecycle is vital.
Managing obsolescence
As products age, they become increasingly likely to go obsolete. When this happens, businesses must decide whether to continue supporting them or bring new products more suited to the current market demands.
History of Product Lifecycle Management (PLM)
Otto Kleppner developed the basic product lifecycle in 1931, describing three stages that a product must undergo:
- Pioneering
- Competition
- Retention
According to Jones, who worked for Booz, Allen, and Hamilton, most products have a life cycle, which he defined as:
- The introduction phase
- The growth phase
- The maturity phase
- The saturation phase
- The decline phase
Patton believes that products are profitable during their growth phase and decline when they compete with one another.
To what extent have these definitions of product lifecycle evolved?
- Since 1985, there has been a clear understanding of the following:
- A high price is essential when it comes to new products.
- Price reductions would occur when different manufacturers compete with each other in the transition from maturity to saturation.
- Market forces, not manufacturers, set prices toward the end of a product's life.
- In general, a product's lifecycle includes the introduction stage, the growth phase, the maturity phase, and the decline phase.
Based on the importance of the product life cycle, there is relatively little competition in the introduction phase of a PLM system; however, development costs are high. AMC or Adroit Manufacturers, which wanted to speed up the development process of the Jeep Grand Cherokee, was one of the first companies to use PLM in 1985.
They earned the bulk of their profits during the growth phase of their businesses when they achieved exponential growth with the help of product life cycle inventory management.
By facilitating the process, PLM allowed them to:
- Increase sales by shortening the sales cycle.
- Reduce costs in development.
- Boost demand-driven production.
- Achieve cost and quality improvements.
- During the maturation and decline of a product, control manufacturing costs.
PLM Solutions
Product lifecycle management (PLM) solutions help businesses manage the activity of bringing a product to market. Product management software encompasses all aspects of product development, from idea generation and concept development to manufacturing, marketing, and sales.
Businesses can optimize efficiency and profitability by managing the product management life cycle model from start to finish while ensuring compliance with regulatory requirements. There are several different PLM solutions on the market, each offering various features and functionality.
However, all such solutions share some standard core features, including:
- Product data management: Centralized storage and management of product data throughout the product life cycle.
- Collaboration tools: Enables distributed teams to work together on product development.
- Configuration management: Tracks and manages changes to product configurations.
- Bill of material management: Manages the bill of material for products.
- Engineering change management: Controls and manages changes to engineering specifications.
What Is Product Life Cycle?
Though we have discussed what PLM product lifecycle management is, let's dive deeper and understand its basics. A product lifecycle is simply an ongoing cycle that begins when it enters the market until its exit.
Managers and marketing pros use this data to decide when advertising should be increased, prices reduced, new markets explored, or packaging redesigned. Managing a product's life cycle involves continuously maintaining and supporting it.
Features of the product life cycle are essential factors to consider when making critical business decisions at large. The most significant advantage posed by the product life cycle is that it encourages businesses to think about their long-term goals with their product. Due to short-term goals, most business decisions fail to consider long-term consequences. To achieve long-term objectives, businesses must make decisions based on product life cycles.
Product life cycle inventory management also helps businesses allocate resources more effectively. Different resources are required in each stage to meet the requirements of a product life cycle. This planning can improve efficiency and reduce waste by allowing businesses to anticipate resource needs.
Example of Efficient Product Lifecycle Management
Several companies that once dominated the market have witnessed a downward trajectory. Often, better management could have prolonged the life cycle of these products, but they may have reached their natural end.
The following are a few examples of product life cycles:
Home entertainment products are abundant at every stage of the product life cycle. As an example, video cassettes have been phased out of stores. There is a decline in DVD sales and a maturity in flat-screen smart TVs. Let's assume XYZ Machines is excellent at managing the product life cycle of its products. They are constantly updated with the latest technology and to match consumer trends, they shifted to a subscription-based model for the last decade. XYZ Machines learned that stalling products during the mature stage of the cycle can be achieved through effective product life cycle management. There are also some famous smartphone companies that are well-established because they follow a sound PLM system. The product is continuously updated to keep it fresh for consumers, beating the competition and delaying the decline stage.
Which Are the Stages of a Product?
The lifecycle of a product consists of seven distinct stages, each playing a crucial role in the product's development, growth, and eventual decline. Understanding these stages is essential for effective product management and successful market positioning.
Stage 1: Idea Generation
The idea generation stage involves brainstorming and identifying potential product concepts or improvements based on market research, consumer insights, and emerging trends.
Stage 2: Screening
In the idea screening stage, the identified concepts undergo evaluation and analysis to determine their feasibility, market potential, and alignment with the company's goals and resources.
Stage 3: Concept Development and Testing
During this stage, the selected concept is further refined, and a prototype or sample product is developed for testing and validation with target customers. Feedback is collected to assess the concept's viability and make necessary adjustments.
Stage 4: Business Analysis
In the business analysis stage, a comprehensive assessment of the product's financial viability, market demand, pricing, production costs, and potential profitability is conducted. This helps to make informed decisions about its launch.
Stage 5: Product Development
Product development involves designing, engineering, and manufacturing the final product, ensuring it meets quality standards, regulatory requirements, and customer expectations. This stage also includes creating marketing materials and preparing for production.
Stage 6: Market Testing and Commercialization
In the market testing stage, the product is introduced to a limited market segment to gather feedback, measure performance, and fine-tune marketing strategies. Once successful, the product moves into full-scale production and commercialization.
Stage 7: Growth, Maturity, and Decline
After successful commercialization, the product enters the growth stage, experiencing increasing sales and market share. It then reaches maturity, where sales stabilize, and eventually, it may decline due to changing market dynamics, saturation, or the introduction of new products.
How Does a Software for Product Lifecycle Management Work?
At its core, PLM software serves as a centralized repository for storing and managing all product-related data, including design files, specifications, bill of material, and manufacturing instructions. This allows teams to access and update information in real time, ensuring data accuracy and consistency.
PLM software also enables collaboration among cross-functional teams involved in the product development process, streamlining communication, task assignment, and progress tracking. Workflows can be defined and automated, ensuring tasks are executed efficiently and project goals are aligned.
TranZact serves as the best software for product lifecycle management as it automates the core functions of a manufacturing business, eliminates redundancies, and increases productivity.
Product Lifecycle Management Stages
The product life cycle can also be viewed as phases of beginning, middle, and end. Establishing transparent processes and communicating at every stage is imperative to minimize wasted time and effort. The three product life cycle management stages are as follows:
1. Beginning of life
Concept, design, and manufacture are involved in this phase of product lifecycle management for consumer goods. The focus shifts from marketing to promotion to getting the product to consumers.
2. Middle of life
Congratulations on completing your product manufacturing and getting it into the hands of your customers. Producing and distributing products will be improved, consumer feedback will be gathered, and maintenance rates will be tracked.
3. End of life
Market saturation may have occurred. Your product may no longer be relevant. Creating a production plan will ensure stock is well-spent. Finding other ways to stay relevant is also possible by iterating, redesigning, or enhancing your product.
Enhancing Your Product Lifecycle With TranZact
Inventory management and product lifecycle management are key challenges for business owners. Maintaining spreadsheets and building up hours of calculations is time-consuming due to the large number of data points they must track. This can be simplified with product lifecycle management software. TranZact offers end-to-end business automation solutions that enable businesses to streamline core functions including procurement, inventory, and sales tracking. This software for product lifecycle management assists businesses in automating their operations and reducing their costs efficiently.
FAQs on Product Lifecycle Management
1. What is a product lifecycle?
A product lifecycle refers to the stages that a product goes through from its introduction into the market, growth, maturity, and eventual decline or discontinuation.
2. What is the difference between product lifecycle management (PLM) and product data management (PDM)?
Product lifecycle management (PLM) focuses on managing the entire lifecycle of a product, including design, development, production, and maintenance. On the other hand, product data management (PDM) specifically deals with the management and control of product-related data and documents throughout the product development process.
3. What is product development software?
Product development software refers to a specialized tool designed to facilitate and streamline the process of creating, designing, and developing new products. It provides functionalities that help manage product data, collaboration, project tracking, and other aspects of the product development lifecycle.
4. What are the principles of PLM?
The principles of PLM (Product Lifecycle Management) encompass the systematic and integrated management of a product throughout its entire lifecycle. It focuses on key aspects such as collaboration, data management, process optimization, and continuous improvement.
5. What is product lifecycle management?
Product lifecycle management (PLM) is a strategic approach to oversee the management of a product from its inception to disposal. It encompasses various stages such as design, development, production, distribution, and end-of-life.
6. Why do companies need PLM?
Companies need PLM to effectively manage their product lifecycle, streamline processes, enhance collaboration, improve time-to-market, reduce costs, and ensure the delivery of high-quality products.
7. What are the 4 phases of the product life cycle?
Throughout the product life cycle of the PLM system, products move from when they are introduced to the market to when they are retired. Products go through four key stages of life: introduction, growth, maturity, and decline.
