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INTRODUCTION TO PRODUCT LIFE CYCLE MANAGEMENT:
All products and services have certain life cycles. The life cycle refers to the period
Of the product’s first launch into the market until its final withdrawal and it is split
up in phases. During this period significant changes are made in the way that the
product is behaving into the market i.e. its reflection in respect of sales to the
company that introduced it into the market. Since an increase in profits is the major
goal of a company that introduces a product into a market, the product’s life cycle
management is very important. Some companies use strategic planning and others
follow the basic rules of the different life cycle phase that are analyzed later.
The understanding of a product’s life cycle, can help a company to understand and
realize when it is time to introduce and withdraw a product from a market, its position
in the market compared to competitors, and the product’s success or failure.
For a company to fully understand the above and successfully manage a product’s life
cycle, needs to develop strategies and methodologies, some of which are discussed
later on.
Product life cycle management:
Product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal. It is one of the four cornerstones of a corporation's information technology structure.All companies need to manage communications and information with their customers (CRM-Customer Relationship Management) and their suppliers (SCM-Supply Chain Management) and the resources within the enterprise (ERP-Enterprise Resource Planning). In addition, manufacturing engineering companies must also develop, describe, manage and communicate information about their products (PLM).
Enterprise resource planning:
Enterprise Resource Planning systems (ERPs) integrate (or attempt to integrate) all data and processes of an organization into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules.
Customer relationship management:
Customer relationship management (CRM) is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer information
The product lifecycle goes through many phases and involves many professional disciplines and requires many skills, tools and processes. Product life cycle (PLC) is to do with the life of a product in the market with respect to business/commercial costs and sales measures; whereas Product Lifecycle Management (PLM) is more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view
PRODUCT LIFE CYCLE MODEL DESCRIPTION:
The product’s life cycle - period usually consists of five major steps or phases:
Product development, Product introduction, Product growth, Product maturity and
finally Product decline. These phases exist and are applicable to all products or
services from a certain make of automobile to a multimillion-dollar lithography tool
to a one-cent capacitor. These phases can be split up into smaller ones depending on
the product and must be considered when a new product is to be introduced into a
market since they dictate the product’s sales performance.
Fig. 1: Product Life Cycle Graph.
Stages of product life management::
1. New product development stage
o very expensive
o no sales revenue
o losses
2. Market introduction stage
o cost high
o sales volume low
o no/little competition - competitive manufacturers watch for acceptance/segment growth
o losses
o demand has to be created
o customers have to be prompted to try the product
3. Growth stage
o costs reduced due to economies of scale
o sales volume increases significantly
o profitability
o public awareness
o competition begins to increase with a few new players in establishing market
o prices to maximize market share
4. Mature stage
o costs are very low as you are well established in market & no need for publicity.
o sales volume peaks
o increase in competitive offerings
o prices tend to drop due to the proliferation of competing products
o brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered
o very profitable
5. Decline or Stability stage
o costs become counter-optimal
o sales volume decline or stabilize
o prices, profitability diminish
o profit becomes more a challenge of production/distribution efficiency than increased sales
o consumer demand for spare parts, maintenance and or product servici
Benefits of Product life management include:
• Reduced time to market
• Improved product quality
• Reduced prototyping costs
• Savings through the re-use of original data
• A framework for product optimization
• Reduced waste
• Savings through the complete integration of engineering workflows
Product Lifecycle Management (PLM) is more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view; whereas Product life cycle management (PLM) is to do with the life of a product in the market with respect to business/commercial costs and sales measures.Product lifecycle management (PLM) is the title commonly applied to a set of application software that enables the New Product Development (NPD) business process.
Within these Product life management (PLM) there are two primary areas:
1. Product Data Management (PDM)
2. Product and Portfolio Management.