Product life cycle management (PLM) manages the data and processes associated with the design, engineering, manufacturing, marketing, sales, and after-sales service over a product’s full lifecycle and supply chain. Although product lifecycle management has a long history in manufacturing, the definition now often refers to a software solution with a broader application than just the manufacturing process.
Product life cycle management concepts were first implemented in areas where safety and management are critical, most notably aircraft, medical instruments, defense, and nuclear. These sectors pioneered the field of configuration management (CM), which grew to electronic data management systems (EDMS) and later into product data management (PDM).
Manufacturers of various instruments, industrial equipment, electronic goods, general merchandise, and other complicated engineered items have realized the benefits of PLM solutions during the last decade. As a result, they are rapidly embracing product lifecycle management software.
What is the product life cycle process?
The traditional product life cycle is an item’s process from when launched to the market until it retires or is phased out. It is divided into four stages. These stages are introduction, growth, maturity, and finally, decline.
While certain items may continue to mature for an extended period, all of them eventually age out of the market due to various factors such as saturation, increasing competition, lower demand, and declining sales. As a result, each product life cycle has an end.
Businesses employ PLC analysis (examining a product’s life cycle) to establish product management strategies for extending the item’s life or changing it to satisfy market demand or emerging technology.
Product life cycle stages
The product life cycle concept, in general, is divided into four stages, beginning with the product design and ending with its depreciation and eventually retirement from the market.
1. Introduction stage of product life cycle
After a product is designed and developed (new product development process), the first stage is to introduce it to the market. This is the stage at which the item is introduced to the market.
When a new product is launched, it is frequently the most important stage in the product’s life cycle, even if it does not always determine its ultimate success. Marketing and promotion are at their peak at the launch stage because they strive to promote their product to the target market.
This stage allows the corporation to gauge how customers react to the product if they like it and its success. However, it is frequently a period of high expenditure for the business, with no certainty that the product will recoup its costs through sales. Costs are frequently prohibitively expensive, and there is little competition.
Part of the purpose of the introduction stage is to increase consumer demand and get the item in front of them. This is the most important phase of the product management life cycle.
2. Growth stage of product life cycle
Through the growth stage, customers have already developed an affinity for the product and increased their purchases. The product concept has been validated and is gaining popularity – resulting in increased sales. At this stage, you need to be careful about your product management process.
At this product life cycle stage, other businesses become aware of the brand and its market sector, garnering attention and generating revenue. Suppose the competition for the product is particularly fierce. In that case, the corporation may nevertheless invest extensively in advertising and promotion to outperform competitors.
As a consequence of the growth, the market as a whole expands. Typically, throughout the growth stage, the product is modified to increase its functionality and features.
As the market increases, increased competition frequently results in lower prices for specific items. Sales, on the other hand, are typically growing in size and generating revenue. Therefore, during this marketing stage ( product portfolio management), the objective is to increase the market share.
3. Maturity stage of product life cycle
When a product achieves maturity, sales typically slow or perhaps cease entirely. According to the product management perspective, this indicates a highly saturated market. As a result, sales revenue of the item may even begin to decline. In addition, at this stage, pricing can become competitive, indicating that margins are contracting due to external factors such as competition or decreased demand.
At this time, marketing is focused on fighting off the competition, and businesses frequently produce new or modified products to target certain market niches. However, given the highly saturated market, it is often during a product’s maturity stage that less effective competitors are driven out of competition – a phenomenon referred to as the knock-out point.
During the maturity stage, saturation has been achieved, and sales volume has been maximized. Businesses frequently innovate to maintain or grow their market share by modifying or developing their product to appeal to new demographics or emerging technologies.
Of course, they need effective product development teams during this phase. This stage might last an extended period or a brief period, depending on the item. For some companies, the maturation process is lengthy.
4. Decline stage of product life cycle
Although corporations would normally seek to keep their product alive for as long as each item will eventually retire during the mature stage, sales revenue reduces dramatically during the decline stage—consumer buying behavior changes due to decreased need for the product.
As a result, the company’s product gradually loses market share, and the competition reduces sales. According to the agile product life cycle concept, this is the end of a product’s life.
Marketing is either minimal or directed at existing loyal clients in the decline stage. Eventually, unless the product is modified to stay relevant or in demand, it will be taken out of the market.
You can see this situation in almost every product life cycle example. For instance, typewriters and telex machines have completed their decline stage and have almost or completely disappeared.
So, what is product life cycle management?
Product lifecycle management, abbreviated PLM, is the process through which an item progresses from an idea to a completely developed product. PLM involves the design, manufacture, sales, marketing, service, and maintenance of a product.
Useful PLM links and organizes the various stakeholders involved in creating a product, increasing efficiency, and establishing a quantifiable, goal-oriented process for bringing an idea to market.
The objective of product lifecycle management is to assure each product developed by a corporation is of the highest possible quality, profitability, and influence on the customer. The following are the primary functions of product life cycle management.
- Managing product documentation, such as design blueprints and a bill of materials
- Keeping track of project information and electronic files
- Identifying and simplifying a certain process
- Assigning duties to members of the team
- Managing who has access to various types of product information
Strategic benefits of product life cycle management
Having a well-managed product life cycle strategy might assist in extending the market life of your product and improve your production systems.
Product life cycle management (PLM) enables cross-functional teams to get a holistic picture of the product. As a result, it serves as a centralized point of control and monitoring for all data and processes within a business. PLM encompasses all facets of a product’s development, from conception to completion.
With the implementation of product lifecycle management, obstacles in large enterprises can be reduced. Businesses must pursue digital transformation (like product development software) to maintain a competitive edge, enhance customer engagement, and ultimately grow their whole business. Let’s have a look at some of the most significant benefits of PLM below.
1. Productivity enhancement
A business that has not integrated product life cycle management can anticipate spending more time on primary activities. This, in turn, occupies additional time, incurs additional costs, and lengthens the new product development process.
Combining all information about the product, such as ideas, designs, blueprints, workflows, and interactions, on a single PLM platform, on the other hand, significantly boosts productivity levels.
2. Risk mitigation
Compliance with applicable laws and regulations is critical for closing the gap between manufacturing, sales, and service. As a result, non-compliance with regulatory norms can result in significant damage to a brand’s reputation, harming customer retention. However, a company can avoid this with the assistance of product life cycle management by being aware of any process deviations.
PLM mitigates risk associated with delays, lost sales, and so on. By implementing adequate planning during the first stages of design, the product life cycle management software helps avoid risks, ensuring a higher degree of success throughout the latter stages. In addition, it ensures that costs are satisfied within the constraints of available resources and supply in a confined environment.
3. Shorter product launch
Businesses across all sectors work hard to introduce new and creative products to keep up with the competition. In this scenario, product lifecycle management enables businesses to get products to market significantly faster.
In general, it takes longer to transfer information from one team to another since the data must be recompiled each time and cannot be examined quickly.
When product versions and other information are transmitted via e-mails, errors can occur. On the other hand, PLM provides a collaborative atmosphere for teams to come together to discuss issues at an early product life cycle stage. It enables the seamless flow of product information between teams and enables international access to data from any platform.
4. Cost control
Product life cycle management gives each team engaged with a holistic perspective of the product lifecycle. This enables them to identify cost-effective and long-lasting raw resources.
Manufacturing and procurement teams can collaborate and provide input during the design stage to make recommendations. This saves money in the long run by avoiding the need to replace materials due to non-compliance. Additionally, it assists in avoiding overstocking or under-purchasing materials.
The aggregated information enables the production team to determine which goods are reusable. This prevents the creation of multiple orders or the omission of bulk pricing. Therefore, agile product life cycle management philosophies enable businesses to lower their cost of ownership and implementation.
5. High-quality products
The majority of high-performing businesses combine customer and product data through product life cycle management. This enables businesses to manufacture new and inventive items continuously. Additionally, PLM provides all teams with immediate access to client input throughout the lifecycle. As a result, all pertinent indicators, such as sales volume, user adoption, and customer loyalty, are simply trackable.
These details aid in product development and enhancement. Additionally, PLM enables the rapid and straightforward tracking of product faults. Additionally, the quality and design processes collaborate closely, resulting in agile product life cycle management methodologies. This guarantees that the products meet regulatory requirements.
6. Effective supply chain
One of the crucial roles of product life cycle management is to organize the supply chain associated with inventory production. By defining each step in the process using PLM, you can uncover waste and inefficiencies and, when necessary, seek out alternative sources, manufacturers, and modes of delivery.
PLM enables firms to develop a comprehensive plan for establishing, maintaining, and optimizing the actual flow of raw materials and completed goods.
7. Pricing strategy
Companies assess the costs associated with each stage of the life cycle throughout the PLM process, resulting in a complete repository of cost data from which they forecast future expenses. You can utilize PLM procedures to forecast seasonal swings and simulate various situations to optimize your pricing model and identify potential problems.
8. Recognize revenue streams
Effective product life cycle management employs a tried-and-true structure for producing potential sales leads and new market prospects. PLM streamlines the process of qualifying leads and chasing revenue-generating prospects, allowing the organization to expand more efficiently.
Final words on product life cycle management
In summary, product life cycle management is a critical subject to understand within a business. Companies must comprehend the traditional product life cycle in order to provide/design successful marketing strategies for each phase of PLM. Effective PLM will almost certainly lengthen the product’s life and enable it to grow in a competitive market.
Product life cycle management stages illustrate how products’ sales and profitability fluctuate over their useful lives. Therefore, product managers must employ appropriate methods at each step of the product life cycle to increase profitability and market share.