Product Life Cycle Management (PLM): A Look At Its History, Stages & Benefits

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Before the mobile phone was the beeper or pager; before flat-screen televisions were bulky TV sets (called Cathode Ray Tubes (CRT)); before color films were black-and-white movies. What do these examples indicate?

Every product experiences a transition. Every product has a lifecycle, from introduction to decline. Managing a product through this lifecycle forms the crux of product life cycle management (PLM). 

Product life cycle management is integral to a product's success. Reports suggest that 80% to 95% of new product launches fail, and approximately 90% of companies are slow to market and over budget. PLM may not be able to solve all these problems, but it can significantly improve an organization's chances of successfully launching a product or service, as well as, effectively managing current products. 

Let's take a deeper look at what is PLM, its history, stages, benefits, and how it influences business decisions, among other things.

What Is Product Life Cycle Management?

By definition, Product Lifecycle Management (PLM) is the process of handling a product or service as it moves through different stages - introduction and development, growth, maturity, and ultimately decline. 

Traditionally, product lifecycle management involves four stages. However, some organizations may introduce a fifth or even sixth stage, depending upon the industry trends and product requirements. 

Today, product life cycle management also refers to the software and tools that accompany each aspect of a product, such as customer relationship management (CRM), enterprise resource planning (ERP), computer-aided design (CAD), supply chain management, etc.  

Who is responsible for PLM?

Different teams are involved at different stages of product development and growth. However, the entire product lifecycle is usually managed by product managers or the product management team. 

Importance of PLM

PLM plays a critical role in determining the business strategy for multiple product activities, from pricing strategy to growth and/or discontinuation plan. PLM provides insights into all aspects of product development, including but not limited to planning, design, manufacturing, distribution, marketing, etc.

To give a summarized answer to the question, what is product life cycle management? 

It is an umbrella term that can mean different things to different organizations, but it broadly refers to the framework or process of managing a product through its entire lifecycle. And its biggest advantage? Helping organizations get innovative products to market faster.

Product Life Cycle Management: History

Today, terms like product life cycle management and product roadmap are commonly associated with the product development process. However, the concept of product life cycle management was first introduced in the 1980s.

At the time, the American automotive industry was dominated by Ford and General Motors. American Motors Corporation (AMC) was a small player in the market, with neither the budget nor the market strength to compete with the big players.

That's when AMC decided to adopt a new approach - instead of spending money they didn't have, the AMC team decided to study a product throughout its entire lifecycle and improve the processes, from procurement to production. Through this activity (arguably the first example of PLM in action), AMC centralized data and computer-aided design (CAD) and used it to speed up design and make procurement more efficient. 

The result? AMC increased its market share, introduced new variants of Jeep, and was ultimately bought by Chrysler. Chrysler continued to use the framework to emerge as the lowest-cost product in the industry by the mid-1990s. Certain reports suggest that Chrysler was able to reduce its development cost by 50%. 

Since then, PLM has become a core business process across industries, enabling organizations to better manage products over time as they progress through the different stages. 

Product Life Cycle Management: Stages

As mentioned above, the traditional product life cycle includes four stages, though organizations may introduce more stages. The four stages of product life cycle management are: 

Introduction and/or Development Stage

Broadly, this covers two aspects of building products—development and introduction to the market, i.e., the product launch. The product planning or development stage includes research, product design, actual development, and focused group testing (demos) to preemptively solve any product issues. This is where product designers or developers prepare the product for the market. 

The introduction stage refers to the cost and strategy associated with launching the product into the market. In other words, the introduction phase is where a product is exposed to the market, and thus, the focus is on advertising and marketing to improve product recognition. Sales are typically low in this stage, and in some cases, a product may fail at this stage and never move to growth. 

Example of a product in the introduction phase:

Most artificial intelligence (AI) products, like smart glasses or self-driving cars, are currently in the introduction phase - while they've captured consumers' attention, they're yet to be adopted by the market at large. However, there is a definite increase in consumer interest in such products. 

Growth Stage

In this product life cycle stage, organizations no longer have to make consumers aware of the product - it has been accepted by the market and typically, organizations should see an increase in sales. In this life cycle stage, the focus is on increasing the market share and ramping up distribution. Product growth is also the stage where product managers need to manage the market competition. Thus, at this stage, product managers rely on customer feedback to manage customer demand and product supply, introduce slight tweaks to the pricing or marketing strategy, and, essentially, take all necessary steps to improve product adoption.  

Example of a product in the growth phase

Electric vehicles are currently in a growth stage. A novelty concept at one point, electric vehicles are now being used increasingly for personal use, as well as commercial products, i.e., cabs. Consequently, there has also been an increase in electric chargers because electric vehicles and chargers are concurrent products.  

Maturity Stage

At this stage, product managers have a mature product in their hands. A mature product is a product that has been widely accepted by the market. This is where sales start to plateau. Consequently, marketing efforts are focused on product differentiation to drive growth and stand out from the competition. At this stage, the focus is on catering to existing customers and improving customer satisfaction. Thus, quality management and customer relationship management also become extremely important for organizations during the product maturity stage. 

Example of a product in the mature phase

Most commonly used electronics, like smartphones or laptops, have now reached the maturity stage. When organizations introduce new models, the focus is on the competitive advantage the new product or service has to offer - better camera, improved battery life, etc. 

Decline Stage

As product sales start declining over time, PLM enters the decline phase. This is when organizations start losing market share and sales start declining. There can be multiple reasons for this, from market saturation to increased competition or changes in technology and consumer habits. 

Product decline is an inevitable stage for any product, no matter how innovative. PLM allows organizations to develop a product life cycle strategy to effectively manage product decline. This can be introducing additional product features to repurpose the product, developing marketing strategies to tap into a new market segment, 

In rare cases, organizations may even reduce product costs to beat the competition and/or clear the inventory before removing the product from the market.

Example of a product in the decline phase

At one point, the Walkman was the go-to device for listening to music, only to be replaced by the iPod. The introduction of the iPod pushed the Walkman into a decline phase. Interestingly, today, both the iPod and the Walkman have become obsolete, and mobiles have become the de facto devices for listening to music on the go. 

Product Life Cycle Management: Benefits 

Oxford Economics revealed that 68 % of customers expect the same quality products and services as they received three years ago but at a faster pace. A comprehensive product life cycle management framework or approach is the key to balancing quality with speed, i.e., efficiently introducing quality products faster. 

Here's a look at some of the major benefits of PLM:

• Improving the production process and reducing the time to market new products
• Develop and adapt marketing strategies for each stage of the product lifecycle
• Streamlining supply management for existing and new products 
• Efficiently manage an entire product portfolio of concurrent products 
• Better forecasts for revenue and profit margin, product budgets, marketing expenditure, etc. 

Overview of PLM Software

PLM (Product Lifecycle Management) software is a tool or system for managing a product's entire lifecycle, from its initial concept and design through development, manufacturing, distribution, and finally, disposal. PLM software integrates people, processes, business systems, and data to streamline the product development process and improve efficiency.

There are different types of PLM software available in the market, ranging from basic solutions that focus on managing product data to more advanced platforms that offer comprehensive features like CAD integration, workflow automation, and supply chain management.

Some popular types of PLM software include PTC Windchill, Siemens Teamcenter, Dassault Systèmes ENOVIA, and Autodesk Fusion Lifecycle. Each of these tools caters to the specific needs and requirements of businesses in various industries, helping them effectively manage their product development processes.

Key Functions of PLM Software:

• Product Data Management (PDM): Centralizes all product-related data, such as CAD models, specifications, and documents.
• Collaboration Tools: Facilitates communication and collaboration among different teams involved in product development, even across different locations.
• Change Management: Manages and tracks changes to the product design, ensuring that all stakeholders are aware of updates and that changes are implemented smoothly.
• Workflow Automation: Automates repetitive tasks and processes, such as approvals and notifications, to improve efficiency and reduce errors.
• BOM Management: Manages the Bill of Materials (BOM), which is a comprehensive list of components and materials needed to manufacture the product.
• Compliance and Regulation: Helps ensure that products meet industry standards and regulatory requirements by maintaining accurate records and audit trails.

Benefits of PLM Software:

• Improved Collaboration: Provides a unified platform for teams to work together, reducing silos and improving communication.
• Faster Time-to-Market: Streamlines processes and reduces delays, helping companies bring products to market more quickly.
• Enhanced Product Quality: Facilitates better design, testing, and manufacturing processes, leading to higher-quality products.
• Cost Reduction: Reduces costs by optimizing resource use, minimizing errors, and avoiding rework.
• Informed Decision-Making: Provides real-time data and analytics, enabling better decision-making throughout the product lifecycle.

Overall, PLM software is a strategic tool that helps companies manage the complexities of product development, improve efficiency, and maintain a competitive edge in the market.

PLM vs PDM: Key Differences

Product Data Management (PDM) is a system for storing, archiving, and managing product engineering designs. It's a core component of Product Lifecycle Management (PLM).

In essence, PDM is a subset of PLM. While PDM focuses on managing design data and collaboration within engineering teams, PLM takes a broader view, encompassing the entire product lifecycle and involving multiple departments.

Conclusion

Since its introduction in the 1980s, PLM has evolved to become a core business process. Today, there are several software tools available for product life cycle management. Many of these tools offer a more sustainable, time-saving, and cost-effective approach to product lifecycle management. These tools also make it easier to transfer and store data and collaborate with different teams. This is especially helpful in the case of teams working from different physical locations. 

Ultimately, the benefits of product life cycle management are manifold. But at its core, it allows organizations to better develop and manage their products and services.

Frequently Asked Questions

1. What is Product Life Cycle Management (PLM)?

PLM is the process of managing a product's entire lifecycle, from its initial concept and design through development, manufacturing, marketing, and finally, disposal. PLM integrates people, processes, business systems, and information to streamline and improve the product development process.

2. Why is PLM important?

PLM is essential for reducing time-to-market, improving product quality, reducing costs, ensuring compliance with regulations, and enhancing collaboration across different departments and geographic locations. It provides a central repository for all product-related information, which helps in making informed decisions.

3. What are the key stages of a product life cycle?

The key stages of a product life cycle typically include:

1. Introduction
2. Growth
3. Maturity
4. Decline

4. How does PLM software work?

PLM software provides tools for managing and integrating product data, workflows, and business processes across the product's lifecycle. It helps in document management, version control, change management, and collaboration among different teams involved in product development.

5. What are the benefits of using PLM software?

The benefits include improved collaboration, better data management, faster time-to-market, reduced product development costs, enhanced product quality, and easier compliance with regulatory requirements.

6. How does PLM differ from ERP (Enterprise Resource Planning)?

PLM focuses on managing the product's lifecycle from conception to end-of-life, emphasizing design and development. ERP, on the other hand, focuses on managing business processes such as manufacturing, supply chain, finance, and human resources. PLM and ERP can be integrated to ensure seamless data flow across the product's lifecycle and business operations.

7. Can PLM help with compliance and regulatory requirements?

Yes, PLM systems help companies ensure compliance by maintaining accurate and up-to-date product documentation, tracking changes, and providing audit trails. This is particularly important in regulated industries such as healthcare, automotive, and aerospace.

8. Who typically uses PLM within an organization?

PLM is used by various departments within an organization, including product design and development teams, engineering, manufacturing, quality assurance, procurement, and marketing. It is also used by project managers, product managers, and executives for decision-making and strategic planning.

9. Is PLM suitable for small and medium-sized enterprises (SMEs)?

Yes, PLM is increasingly accessible to SMEs through cloud-based solutions and scalable platforms that can be tailored to the specific needs and budget of smaller organizations. These solutions can provide the same benefits as traditional PLM systems without the need for significant upfront investment.

10. What are the challenges of implementing PLM?

Common challenges include high initial costs, resistance to change from employees, integration with existing systems, data migration, and the need for training. However, with proper planning and management, these challenges can be mitigated.

11. What are the key features to look for in a PLM system?

Key features include product data management (PDM), document management, change management, BOM (Bill of Materials) management, workflow automation, integration with CAD and ERP systems, collaboration tools, and support for regulatory compliance.

12. Can PLM integrate with other enterprise systems?

Yes, PLM can be integrated with other enterprise systems such as ERP, CAD, CRM (Customer Relationship Management), and SCM (Supply Chain Management) to create a seamless flow of information across the organization.

Suggested Reads: 

• Product Roadmap: A Complete Guide To It, From Creation To Best Practices
• What Is Product Management: Its History, Scope & Essential Skills
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