With the advent of the internet in the modern world, data processing on a large scale is possible like never before. Data analytics has found its way into every field of operation in the modern world. Right from competitive sports to software development, data analytics has forayed its way into every major sphere of work. This is majorly due to the advancements made in computers in the last few decades. With the exciting advancements in hardware and software made in the last few decades, it is possible to process larger chunks of data than ever before. That is, it is possible to process a higher volume and at the same time, it is possible to process this data faster than ever before. This has given rise to big data and its analytics. It is hard to even fathom the size of data that is possible to be processed by computers these days.
One of the ways available to make use of this data is by the use of product lifecycle management or PLM. PLM offers the ability to organize various development strategies, capabilities, and information on a scale. This helps various stakeholders of a project lifecycle to see how the product is being used and what the performance is in real-time. This is especially beneficial because the stakeholders do not have to wait for clients to report discrepancies as they can spot these in advance using this system.
In this article, we will look at the PLM system and how it is crucial to the project management process and the organization in the larger context. Having an understanding of this process is crucial for project managers and is useful to anyone involved in the project management process.
PLM or product lifecycle management is a comprehensive framework that organizations use to manage products through the phases of the product lifecycle. PLM system contains all aspects of a product including planning, managing, design, manufacturing, marketing, resources, and software. These resources are inclusive of human resources. It is used as an umbrella term where the subdivisions under it are created curating to the needs of the specific organization and their order of business. It has become a market on its own that in fact, various software companies offer PLM software solutions that help product managers occupied with decision making in pricing and marketing strategy. This happens so much that PLM has been taken to mean or refer to PLM software systems by a lot of organizations.
Therefore, we can gauge that PLM implies the integration of every aspect of a product, taking it from its initiation to its delivery. PLM helps align the vision of the organization with the software in place and the people employed in the process. This aligns the management of data to the manufacturing and marketing process. This in turn aligns the entire process towards the end product and its delivery.
This PLM system can help optimize the whole process for a higher level of efficiency. This means a lesser cost incurred as well as faster delivery of the product itself. As mentioned earlier, the PLM is the base generic process and is curated as per every individual organizational need. An ideal PLM would be holistic and would be able to manage and secure product information. It would also ensure that the so acquired information is used in future business processes.
Even though it is a generic umbrella term, PLM has three main elements. Information and Communication Technology or ICT is the first main element. This consists of the necessary systems and platforms which are the tools and internal framework standards being adopted. The processes are the second element. They include all the resources like people, skills, and organizations involved. The third element is the methods. This consists of the practices, rules, and procedures.
One of the major reasons for the widespread use of PLM nowadays is due to the increasing globalization of the market. That is manufacturing or production of products have been split across the globes for singular products with heavy reliance on supply chain coupled with shorter time expected for production. This is only further boosted by the availability of the internet which makes sharing information among partners spread out globally, possible. Here PLM offers the possibility of overview and adjustment of the manufacturing process in real-time while it is still occurring.
Four Stages of the Product Lifecycle and its Management
To get a better understanding of Product Lifecycle Management, we need to understand the underlying Product Lifecycle first. Any given product has to move through the lifecycle in its lifetime. That is beginning with the product launch and ending with the removal from the market shelves (physical or virtual). This product lifecycle model will help you get a clearer understanding of the whole product lifetime and help you understand how to manage different phases.
Even though the lifecycle is generic and differs with every product, organization, and market in which it is deployed, it has four phases that are found commonly across platforms. The four phases are Introduction, Growth, Maturity, and, Decline. Even though there are several other variations with more phases, these four phases are the traditional divisions and can invariably be demarcated in any product’s lifetime. A product lifecycle strategy can be formulated after a clear understanding of these phases.
Stage 1 – Introduction
The lifecycle begins with the launch of the product and that is the introduction phase. This is after the effort of researching and then designing and building on the research that has already been done. Launch in itself is a specialized process even with a finished product ready and available. Here the focus lies on aspects such as sales, advertising, and distribution rather than profits. Here, typically the product manager will have the task of creating awareness about the product as well as clarifying the specifications of the product, both to the sales team and the market clients.
Stage 2 – Growth phase
A product reaches its growth phase after a successful introduction into the market. By this phase, the clients in the market have already started embracing the product and are willing to shell out money to obtain the product. Now the goal is to gain new customers as rapidly as possible to capture a higher percentage of market share. There is a strong reliance on word-of-mouth promotion from existing customers at this phase. Here, the focus is to further the product by planning marketing strategy and price updates and planning new features that can be added. Capacity and distribution have to be overhauled as per the initial market performance assessment. However, companies cannot afford to be too cautious as they would risk losing their market share to competitors. The growth rate has to be managed as a sudden increase can cause the product to fall flat with high demand and no availability and can also cripple the infrastructure system that is put in place.
Stage 3 – Maturity phase
The maturity phase is deemed to have started with a reduction in the rate of growth. As a general rule, this phase is the longest for products. The growth in sales either slow down considerably or simply hit a plateau. Most commonly used products in the market are generally already in the maturity phase of their lifecycle. Here, the focus lies in ensuring that there is a differentiation in your product in comparison with the rest of the competing market products that are available to the client base. One of the typical moves made in this phase is the reduction of product prices to ensure that the product remains competitive as well as to maximize sales. Generally, a successfully launched and marketed product that is the market leader would enjoy maximum profits at this stage. Other runners-up in the market would experience a dip in profits due to price reduction strategies as well as the overwhelming market competition. A lot of organizations tend to aim to elongate the maturity phase for as long as possible. One of the strategies invoked for this purpose is the release of variant products at the point of the projected end of the maturity phase. However, this can lead to a counter-productive phenomenon called cannibalization, which is the variant that might start eating into sales of the existing product. Organizations aim to avoid this phenomenon by seeking to ensure the existence of clear differentiation between the main product and its variants.
Stage 4 – Decline phase
It is an inevitable end phase for any given product in any given market aimed at any given demographic. Even if the product was a market leader, it will inevitably reach this phase, albeit a little later than other products. In a free market, there are various reasons why this occurs. One of the main factors is any changes and advancements in technology that have been made since the onset of the introduction phase. This might lend the possibility of the same or a similar product being better with the advancements so achieved. Also, some technology might render certain products redundant. In a free market, product innovation can creep up from fellow competitors in the market as well as from around the world. The product might not appeal as much to a newer generation of consumers and might not appeal to existing customers with changing habits as well. Sometimes certain companies plan this phase to perfection to ensure that clients buy newer models of the same product as a replacement. This is done by phasing out the old product while simultaneously hyping the next entry. An example of this would be the smartphone market.
The product lifecycle is divided into three stages to facilitate the management of the product. This is a further simplified demarcation of the product lifecycle and is done to better handle the product from a management perspective. In this, the lifecycle is divided into the beginning, middle, and end. Product management can be achieved to a greater level by establishing the processes early and making sure that the flow of communication happens clearly. Better coordination can ensure that the process is optimized for efficiency which in turn would ensure that there is minimal wastage of resources. These stages provide you with a product management life cycle model which can be further curated according to the needs of your business, for example for developing software it would have a software product life cycle.
Stage 1 – Beginning of life
This stage starts with the conception of the product. This is followed by the development of the product and is automatically inclusive of the design, planning, engineering, and manufacturing of the product. Initial product marketing and promotions are also part of this stage as this stage sees the product through to its launch and introduction into the market.
Stage 2 – Middle of life
At this stage, the product is being manufactured and is being used by customers in the market. The production and distribution system put in place during the beginning of life stage has to be revamped as per the market demand to ensure smooth supply of the product and to optimize the effort put into the process as well. It is also crucial to gather market feedback and make any improvements that can be made to ensure customer satisfaction with the product. Maintenance of the quality of the product, as well as its relevance and parameters of sales and profits, is vital in this phase. The aim is to elongate the middle life of a product to ensure maximum gains are made from it. Here we can understand the importance of the product life cycle in marketing management.
Stage 3 – End of life
At this point, the market in which the product operates has become saturated. This might due to a variety of reasons such as the advancements in technology or shifts in the market pattern itself. Another possibility is that the product has become redundant due to changes in market trends or the rise of technology. It would be wise at this juncture to start planning the close of production to avoid the wastage of products. Of course, the option to stay in the market exists. One can cycle back to the beginning phase by going for product updates and redesigns and perhaps by the introduction of variants. This can be aided by the data collected during the middle life of the product. If the product can be revamped to cater to client demands, it can cycle back to the beginning phase.
Benefits of having a Project Lifecycle Management
Breaking down the product lifecycle into phases for easier management can aid in the effective utilization of the whole process to maximize revenue and reduce wastage of resources. It is important and has become the norm while developing new products. This helps in determining the viability of a product right from the onset without necessarily waiting for the market reaction to evaluate the same.
One of the major advantages of the PLM system is that it can significantly improve the speed at which the work occurs. This is due to various factors like the fact that it allows managing project intent to align it with customer expectations. The best PLM software, like SAP PLM, helps you manage this with ease.
Managing the product overall becomes easier as PLM provides answers to various basic queries starting with whether the product is worth pursuing at all. It also helps determine competition beforehand to calculate its chances of surviving in the free market. Also, every revenue generation angle on the product can be explored to maximize profits that can be accrued from the product.
It helps ensure that information available with the company is used along with data collected from the market to cater to the product appropriately to reap maximum profits. It also helps constantly evaluate the product and its manufacture and distribution system by using the market data. Many companies have historically wasted resources because of not considering data.
This also causes them to go over budget which can be avoided by planning using the data available. PLM enables the management of data in a clear, concise, and valid format. It also enables accurate and efficient data collection.
This in turn helps them introduce the product faster as well as overhaul the production and distribution as per market demand. It also helps them price the product in a competitive manner which enables them systematically capture a higher market share. All the data gathered over the lifetime of a product can be used to launch future products. As they say, data is indeed the king.
The role of Product lifecycle management in the effective outcome of the product cannot be understated. Knowing the product life cycle in project management can be especially beneficial as it can help ensure the overall success of the product.
There is various lifecycle management software available now that help makes the data analysis possible which is required to carry out this process on a large scale. One needs a thorough understanding of the PLM system to make the best use of this product lifecycle management software.
The use of PLM tools backed by a clear understanding of its underlying concepts can help in delivering effective products which are sought after by the clients and reap profits for the company. The SAP PLM model, for example, can help you organize the various facets inside a single business suite.
To further your career in project management and product management, a thorough understanding of these concepts is a must. Getting a certification offered by a governing body like PMI can help prove your competence in this regard. Taking the help of a reputed training body like Sprintzeal will be highly beneficial in the pursuit of this knowledge as well as the certifications. Join Sprintzeal now!
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