The life cycle of a product is the period during which the asset is available on the market. This is a well-known concept originally derived from marketing, but now it owes its popularity mainly to the fact that there are numerous IT solutions on the market supporting PLM management.
What should you know about Product Lifecycle Management?
Each product life cycle consists of individual stages. The product is first “born”, then “grows”, “matures” and “dies”. You should note that the word cycle is a big simplification, therefore the time taken for each product to go through the individual stages can be longer or shorter. Each stage can last for weeks, months or years. Each of the steps of PLM are described below.
Development and introducing the product to the market
The first phase is introducing the product to the market. As a rule, in the beginning, sales are low, the product is little known on the market and the distribution of the product is difficult, therefore the production costs of a new product may be higher than those of previously known products. All this makes the profitability very low.
Growth
In the second phase, there is an increase in sales, which is due to the fact that its recognition increases and it is easier to reach the appropriate distribution channels. Thus, the number of customers increases. At this point, the product becomes profitable very quickly.
Market maturity
After the growth phase, it is time to reach market maturity which is natural, as in the case of almost every product, the moment of market saturation comes at some point. Moreover, once the product has been on the market for some time, potential customers are less and less susceptible to advertising. This is the moment when you need to decide whether the goal is to maintain the position in the market or gain new market segments.
Decline
Every product matures and then dies. It is true that the downward phase may come only after several dozen years or any other very long time horizon, but it is inevitable. The most common reasons for declines are the appearance of numerous substitutes in the market and increased competition. In addition, it should be noted that factors influencing sales, such as the manner of advertising or the method of distribution are constantly changing. What was effective some time ago simply does not work now.
IT supports PLM
Product Life Cycle Management can be supported by appropriate IT solutions. An example is the Windchill solution, which allows for extensive cooperation with CAD models. Examples of functionalities that such software has to include:
- Extensive product design options – from the raw material, through the successive stages of the process in which semi-finished products are made, to the finished component.
- BOM management – including the ability to manage raw materials and manage semi-finished products.
- Change management in the production process.
In summary, the use of an appropriate IT tool for PLM is very important in effective product life cycle management. It is worth noting that the implementation of appropriate PLM management tools is one of the important components of enterprise computerisation, which is currently more commonly referred to as Digital Transformation.