PLM systems are geared to give enterprises a 360-degree view of all phases of a product's lifecycle -- from cradle to grave, says Mike Dominy, senior analyst at the Yankee Group, an industry analyst firm. From the very first iteration of an idea through its design and development to the manufacturing floor and beyond, PLM systems attempt to incorporate all aspects of a product's costs, features and functionality into a unified view by combining all manner of data from across the enterprise into the development process as early as possible.
''PLM essentially unifies the R&D, engineering functions and processes, along with many of the traditional manufacturing and supply chain processes and some of the customer-facing processes into one holistic view point,'' says Dominy. ''It's all focused around the product and the product being delivered and manage from conception to whatever the end of its life is.''
To do this, PLM solutions link disparate applications, such as ERP, CRM, and SCM, that enterprises depend on for daily decision making. Suppliers also can be included into this process -- especially in complex industries, like aerospace, where PLM is widely used.
Unlike so many other enterprise applications, PLM is not a single solution installed from a few CD-ROMs, even though it does involve software and integration tools. Rather, it is a way to reorganize and rethink the entire process of how a company brings products to market. It alters established workflows and integrates business processes.
''It's a conglomeration of multiple solutions that you implement and integrate throughout a common architecture to make all this possible... At the end of the day, this isn't about a CAD system anymore. This is really about business transformation,'' says Geoff Rogers, the America's marketing manager for IBM.
Even customer feedback from existing product lines, much of which is lost today, can be incorporated into the PLM system. This is the 'lifecycle' part of PLM.
For example, a German auto maker is using IBM Thinkpads plugged into automobile dashboards to help dealership mechanics diagnose problems. And in the process, the application captures useful service information about the car that can be transferred back to its design and manufacturing departments.
It is also saving the manufacturer money on warranty replacement parts, while making for happier and -- hopefully -- more loyal customers, says Chris Sciacca, an IBM spokesperson.
Although thousands of companies like IBM are using PLM systems, few companies outside of the auto and aerospace industries have adopted it across the enterprise. More often than not in today's tight budgetary climate, companies start with one aspect or module of PLM, like a document collaboration suite, on the way to a broader, more comprehensive solution.
In this way, the massive changes an organization may undergo because of PLM can be phased in over time. Also, with the cost spread out over a longer period, ROI can be more easily measured before the next phase is implemented. Add in today's integration software and legacy environments no longer have to be overhauled to bolt on aspects of a PLM solution. This lets companies meander toward a solution, rather than make a head-long rush to capture ROI.
''It's very important that we can offer those packages which allow a very quick implementation and also very fast turnaround time,'' says Stephan Schindelwolf, vice president for PLM Product Management at SAP. ''That way we can, step-by-step, help the customer to go for the complete solution in the end.''
Canadian aerospace supplier Heroux-Devtek is taking this approach.
Nagi Homsy, the company's vice president of engineering, decided to introduce just the product development and collaboration aspects of Dassault System's PLM solution, Catia-SmarTeam, on the way to a much more inclusive implementation. Installed by IBM, Dassault's implementation partner, Catia-SmarTeam allows Homsy to automate version control of drawings and prototypes. This means the engineers always know who is working on what and which prototypes go with which drawings, solving past problems.
The system is the first step in a larger implementation that will eventually link the company's three engineering and manufacturing centers, as well as its suppliers, which are miles apart.
While PLM is aimed at hard-product manufacturers, like auto makers, other industries, such as petrochemicals and major pharmaceuticals, also are adopting specialized PLM solutions from niche providers, like Selerant Corp. For the most part though, PLM is aimed at organizations that produce hard products. PLM is designed to turn the entire extended enterprise into a shared data repository with a common purpose: Make a better product, make it faster and make it for less money.
''The overall market size for PLM is smaller than that for CRM or SCM,'' says Schindelwolf. ''But I think it's a pretty good growth opportunity because companies are becoming more and more aware that they have huge potential for overall process improvements.''