"PLM is an emerging technology with a lot of growth in front of it," Bob Nierman, president and CEO of RuleStream, told the Lean Advancement Initiative (LAI) at MIT in 2005.

Since then, product lifecycle management has matured enough that leading companies throughout the world are using it. And that, as Nierman said, is "a confidence-building factor."

Those considering starting to use PLM or upgrading their PLM abilities can look at this technology from two viewpoints: 1) the influence on the overall company and 2) how PLM fits into engineering.

PLM's Affect on the Enterprise
As PLM is more widely used, finding and effectively using the best software for the product under development separates the prosperous companies from those who struggle to compete.

In other words, "PLM remains the cornerstone of improved product innovation performance, but the advantage gap is closing as adoption expands," according to a recent report from the Aberdeen Group, entitled Product Innovation Agenda 2010: Profiting From Innovation Today and Tomorrow.

Aberdeen's report, released in December, found that more than 80 percent of companies are focused on driving profitable growth through product innovation, while many participating companies are looking to make innovation a repeatable and sustainable process.

What does innovation have to do with PLM? Well, the pressure to select the best PLM system results from the demand for high revenues through innovation. PLM contributes to increasing revenue in many ways. "Shorter design times and faster change cycles yield earlier production introductions and optimized products," says Product-Lifecycle-Management.com.

Aberdeen's study of 230 companies using PLM shows what companies have done to gain significant performance advantages in product innovation and profitability:

• The "best-in-class" performers are 32 percent more likely to hit product revenue targets than industry-average product developers and 2.6 times as likely as industry laggard companies.
• The best-in-class group is also 34 percent more likely to hit cost targets than the industry average and 2.7 times as likely as laggards.

When Aberdeen examined the percentage of products meeting product development targets and compared the best-in-class group with the laggards, the findings were striking:

• Regarding product revenue targets, 83 percent of the best-in-class group's products met the product revenue targets while only 32 percent of the laggards met this goal.
• The differences for product cost targets were similar with 87 percent of the best-in-class firms meeting their aims, but only 32 percent of laggards able to achieve their ambition.
• Concerning the ability to meet product development budgets, 82 percent of the best-in-class companies stayed within budget while only 29 percent of the laggards could do so.
• Looking at product launch dates, 82 percent of the best-in-class businesses met their deadline, but only 30 percent of the laggards could manage this feat.

For today, Aberdeen offers a guideline for achieving best-in-class performance, suggesting companies do the following:

• Make a chief procurement officer, a chief information officer or equivalent executive responsible for product innovation;
• Implement Lean product development and other best practices; and
• Provide engineering with greater visibility as to how the decisions they make impact the product life cycle and product profitability.

Moreover, Aberdeen suggests that companies seeking to retain leadership over the next three years must: 1) place more focus on product innovation as a process; 2) formalize processes; and 3) extend PLM into the larger enterprise.

How PLM Fits into the Design Engineering Process
In comparison with computer-aided design and computer-aided engineering (CAE), PLM solutions have evolved to be "more generalized, providing more functions and general management capabilities for the extended enterprise," noted Dassault Systèmes in a paper a few years ago. (See today's Solve the CAD File Exchange Problem)

As explained by Product-Lifecycle-Management.com, a PLM system:

• Contains all product information in a secure central location;
• Allows multiple users simultaneous access to the data;
• Provides templates for change types;
• Identifies all disposition tasks and rolls up cost impacts automatically; and
• Uses e-mail so there is no lag between one person's approval and the next person's notification.

Another benefit of PLM and related technologies comes from helping leading companies with collaboration, addressing the operational challenges of global design and managing product development and engineering processes across widely dispersed teams, as we noted earlier.

Product data management (PDM) — a part of PLM — enables engineers to work carefully and efficiently with huge amounts of data. In a paper entitled A New Paradigm for Digital Design, one vendor explained PLM this way:

Using the power of relational design, engineers can navigate impact graphs to understand the affects of a part change on other parts, drawings, analysis results, specifications, operating parameters, and manufacturing processes and resources. A tight integration with CAE and digital mock-up tools helps engineers visualize change impacts and resolve them effectively.

PLM has indeed emerged as the primary means by which to improve product development processes across the value chain to deliver the most business value.

Earlier: Lessons in the Business of Design

Resources

Product Innovation Agenda 2010
by Jim Brown
Aberdeen Group, December 2007

Industry Spending on PDM/PLM
Lean Advancement Initiative - MIT, Oct. 31, 2005

Benefits of Product Lifecycle Management (PLM)
Product Lifecycle Management, Aug. 24 2007

A New Paradigm for Digital Design
IBM, March 2004

Solutions Product Lifecycle Management
PTC.com