Product lifecycle management (PLM) is a critical component of any successful supply chain strategy. By recognizing key stages in the lifecycle of a product and managing them accordingly, organizations can ensure they are best positioned to optimize their supply chain and increase profitability.
There are two main ways that Product Lifecycle Management (PLM) can be used for optimization:
- Product Lifecycle Management enables organizations to accurately forecast demand and shape the markets in which they operate. By understanding every stage of the product lifecycle, organizations can develop scenarios and use their data to make more informed decisions, reducing potential risks associated with supply chain operations.
- Product Lifecycle Management also enables organizations to better manage end-of-life products. By creating an action plan that identifies potential opportunities or risks and incorporating assumptions into planning, organizations can minimize exposure risk and maximize their supply chain operations. PLM can also help reduce costs associated with product disposal.
Product Lifecycle Management (PLM) is an invaluable tool for organizations looking to optimize their supply chain operations. PLM enables businesses to effectively manage and monitor the entire product lifecycle from concept, design, and manufacture through to sale, service, and disposal. By breaking down the process into five distinct tasks – analyze market conditions, create an action plan, manage end-of-life products, discontinue products, and review results – organizations gain a comprehensive understanding of their processes and identify areas for improvement. This enables better resource utilization, maximizing efficiency while minimizing costs and unlocking new growth opportunities.
Identification
The first step of product lifecycle management is identification. This involves segmenting SKUs, categorizing poor performers or markets, and developing strategic plans to identify gaps and uncover opportunities for improvement. Understanding a product’s lifecycle and recognizing potential weaknesses gives organizations invaluable insights into their supply chain operations.
Rationalization
The second step of product lifecycle management is rationalization. This involves eliminating redundant or unnecessary products to free up resources and focus on core products with higher returns. It also helps identify new markets, segments, and customer groups for growth. By reviewing product portfolios in detail, organizations can adjust strategies to maximize efficiency and profitability.
Action Plan
The third step of product lifecycle management is creating an action plan. This includes developing a strategy that considers market conditions, customer needs, production costs, and competitive pressures. With a clear plan outlining objectives and tactics, organizations can optimize resources, minimize production costs, and adapt to changing markets and customer demands. Regular monitoring and adjustments ensure the plan remains effective over time.
Managing End of Life
The fourth step of product lifecycle management is managing end-of-life (EOL) products. This involves identifying the best course of action for each product at its end-of-life stage, such as recycling or repurposing. PLM can also identify opportunities for new product development, applying insights from past successes to improve future products. A well-rounded EOL strategy considers both financial and ecological impacts, helping organizations minimize risk.
Discontinued Products
The fifth step of product lifecycle management involves discontinued products. This includes proper disposal of obsolete or unprofitable items while considering environmental impacts, particularly with hazardous materials. PLM helps reduce the carbon footprint by reassessing production methods and materials, while customer feedback provides insights for replacing discontinued products with improved alternatives.
By following product lifecycle principles and implementing a structured process with regular reviews, organizations can effectively manage products throughout their lifecycle. This enables stakeholders to track demand shifts, market share, and customer needs. Employing clearly defined measurements and forecasting techniques ensures companies can reconfigure plans for success, keeping products relevant and profitable throughout their lifecycle.
Implementing these practices helps organizations respond to shifts in demand and maintain a profitable inventory, ultimately improving customer satisfaction and profitability. Product lifecycle management is essential for navigating the product lifecycle from development through end-of-life and beyond, ensuring sustained success in dynamic markets.
Are you getting the most up-to-date SAP data on your SKUs? If accessing real-time Product Lifecycle Data is challenging, connect with a Simplement team member today to see how Roundhouse can empower better decision-making.
