Cutting through the clutter: PLM demystified

There are basically two types of products that dominate the market – those that drive the market, and those that are driven by the market. This axiomatic truth was underlined by a team of researchers from Austrialia in 2004.

Their study covered Chinese business-to-business (B-B) companies, whose products are meant for businesses rather than individual consumers; but their conclusion can be applied to all companies universally.

The products that fall into the market driver category are usually what are known as 'clutter breaker' or 'category killer' products. They are unique, novel and highly innovative. Obvious examples are the Apple iPhone and iPod. Another classic example could be Sony's walkman in the early 1980s. Innovations like these have revolutionised industries and changed the way markets function.

Once companies succeed in elevating the standards of product innovation and quality to such high levels, it becomes very difficult for the competition to catch up with them, and then the company manages to retain and secure a competitive edge for a longer time.

Innovation, time to market, and cost are the three crucial determinants of developing a product that drives the market. With everything else - be it efficient workflow configuration, effective customer management, or incorporating proficient supply chain management models - the company can surpass the competition only for a temporary period as the competition soon manages to catch up. But managing to match up with exemplary product innovation is difficult; and that is where the company can win the game and make competition struggle.

Where PLM fits in
Companies have to address four most critical areas for effective business management and expansion:

• Customers: The companies manage this through customer relationship management (CRM)
  
• Suppliers: Companies address this through suppliers' chain management (SCM)
  
• Enterprise Administration and Resource Planning: This is done through enterprise resource planning (ERP) solutions
  
• Systems planning: This is achieved through systems development lifecycle (SDLC) tools