With industry increasingly interested in managing processes across the entire lifecycle of the design, creation and sale of a product or service, product lifecycle management (PLM) is in demand.
Professor Alain Bernard, an expert on the subject at the Ecole Centrale de Nantes, describes PLM as the “nervous system” of a company. “It is as essential to a business as enterprise resource planning,” he says.
Spending on PLM in Europe, the Middle East and Africa hit $8 billion (£4.9 billion) in 2012, according to analysts at CIMdata, 10 per cent growth on the previous year. Globally, vehicle manufacturing is the largest area of spending, at $5.2 billion, followed closely by general manufacturing and assembly, then telecoms and high-tech manufacturing, and aerospace and defence.
Traditionally, manufacturing industries, particularly car production, have used the software to align the design and production of all elements of a product. In the mid-1980s, Jeep manufacturer American Motors Corporation became one of the first to apply PLM, involving computer-aided design and engineering collaboration systems.
Overall, manufacturing for transport, communication, aerospace, electrical and battery goods has the highest compound annual growth rate in PLM spending over the last five years, each category standing at more than 7 per cent, according to researchers Cambashi. In the most recent year of measurement, 2012, the strongest increase came from the aerospace sector, at 8.4 per cent.
Now, other industries from finance to retail are becoming involved. Chad Jackson, principal analyst at Lifecycle Insights, explains that these industries can use the approach “to bolster top-line growth by accelerating time to market or developing innovative products”, as well as “to curb costs or enforce compliance”. PLM will become a standard part of the lifecycle management “of anything instead of merely products”, he says.
Telecoms companies use PLM to configure mobile phone plans, and financial services firms use it to help them design and sell products
Construction is among the more recent industries to take up a form of PLM, called building information modelling (BIM), with Cambashi data showing more than a 5 per cent compound annual growth rate in spending over the last five years.
“When a building is being constructed, there are often many different companies involved with a competitive, rather than a collaborative, mindset,” says Roger Tempest, co-founder of the PLM Interest Group. “PLM helps bring them together.” Balfour Beatty and Carillion, among the world’s largest construction firms, use BIM to improve processes and collaboration with contractors. A good example of a BIM-compliant infrastructure project is London’s £16-billion Crossrail project.
High-tech manufacturing will be increasingly dependent on the technique, according to Oleg Shilovitsky, author of the Beyond PLM blog. “Products today are very software dependent. A modern car has more than 100 million lines of code,” he says, adding that PLM can help manage the linking of software and mechanical parts for a seamless item.
Manufacturers of medical devices regularly use PLM to improve standards. But concerns over protecting patents and design are slowing inter-company discussion in this industry. “A company here often won’t share ideas, except with a business in a completely different industry, if there are some similar parameters,” says Mr Tempest.
Clothing companies apply the methodology to help design and use new materials. Sports goods firm Adidas has implemented PLM in recent years to create a single database for all its product information and materials management, improving efficiency and aiding collaboration with partners. The new model gives it the ability to speed up design and production.
Furthermore, PLM helps with the globalisation of production, says Reid Paquin, a senior research associate at Aberdeen Group. “With 90 per cent of the manufacturing for footwear done in Asia, while the design is done locally in the United States and Europe, PLM is needed to keep intellectual property safe, while allowing a global supply network to collaborate and run effectively,” he says. Since 2010, Asia-Pacific has experienced the largest growth in overall spending on PLM, though it slowed to 14 per cent last year, according to CIMdata.
The growth in retail is equally notable. Grocery chains Tesco and 7-Eleven use PLM to control and manage product data, and work better with product suppliers and designers. Brian Marsden, Europe, Middle East and Africa president at specialist provider TradeStone Software, says retailers of all types are using the technique in a volatile sales environment to ensure products are relevant and competitive. He says: “A retailer’s season can be as short as three weeks and it is not uncommon to be working on three or four seasons simultaneously, making the entire process incredibly complex.”
Store chains are also developing three-dimensional models “to help improve the layout of their products and streamline foot traffic”, Mr Paquin adds. “And they are using heat maps of consumer eye patterns to detect which product designs are the most appealing.”
Meanwhile, in the health sector PLM allows providers to shape treatment. “Organisations are looking at the management of patients’ lifecycles, how they react to drugs and when they come in for an appointment,” says Ecole Centrale de Nantes’ Professor Bernard. “It is also relevant for the whole process of prosthetic limbs, from imaging and design, to manufacturing, personalising and fitting.”
In pharmaceuticals, Bayer HealthCare implemented the technique to improve its global visibility of product, packaging and ingredient data, so it meets regulatory compliance, works better with suppliers and cuts production costs. The company now has clear global visibility of data.
In the energy sector, PLM helps with long-term knowledge retention. “When energy companies design a nuclear plant, they are looking at its lifecycle,” says Professor Bernard. “With older plants, companies are using PLM to revisit the construction and to define carefully how to dismantle them when they reach their end of life.”
Services firms are also recognising PLM’s potential. Stan Przybylinski, a vice president of research at CIMdata, explains: “While these companies may not need computer-aided design tools, they do have the same issues of configuring their services correctly. Telecoms companies use PLM to configure mobile phone plans, and financial services firms use it to help them design and sell products.”
This kind of planning can help with maximising the profit margins of services, as well as ensuring their suitability, and the finance sector alone has experienced a near 6 per cent compound annual growth rate in spending over the last five years, according to Cambashi.
Small and medium-sized enterprises (SMEs) are moving in increasing numbers to adopt the approach. But PLM Interest Group’s Mr Tempest says there is a significant “dividing line” at the mark where companies have 500 or more employees, with many smaller firms having trouble visualising the benefits of PLM. Mr Przybylinski adds: “As companies start to develop more complex products, that’s when they tend to adopt PLM, so that they have a better understanding and analysis.”
Sometimes SMEs are enticed by the potential of smaller, cloud computing-based deployments. Richard Tinsdeall, a director of PLM at software supplier Autodesk, explains that SMEs are “investing tens of thousands of pounds in PLM and seeing a return in three to four months, which wasn’t possible before”.
Whatever the size of business, when PLM is executed properly, it can link all parts of an organisation from first ideas to manufacturing, human resources, sales, marketing and quality. “It brings together everyone in a company,” Mr Tempest concludes.