In Part One of this series, we discussed Product Life Cycle Management as a proven concept in the discrete industries and as a growing concept in process. In this part, we explore the business motivations for PLM in process enterprises by reviewing business strategies. In part three, we will look at requirements for Process PLM decisions.
The business strategies reviewed are:
* Accelerating Time-to-Market
* Increasing the success rate of new products
* Increasing the profitability of products
* Increasing return on assets
Accelerating Time-to-Market
Time-To-Market is the delay between an idea, from the marketing department or a customer, to the general availability of the product. The compression of this time leads to greater responsiveness to market demand, greater market share and greater profitability. Time-To-Market can be broken into two periods, idea to final product design and the decision to commercialize the product to its availability on the market. Speeding Time-To-Market encompasses both time periods.
Time-To-Market is not only important for new products. The Director of R&D of a leading food company tells us that 50% of her R&D efforts are for new products. The remaining 50% are on changes to existing products. These changes are demanded from a variety of reasons including cost reduction programs and reacting to changes in raw material supply.
To speed Time-To-Market, a comprehensive approach is required. The business processes involved include many internal and external organizations. Internal organizations often include marketing, R&D, production, quality and others. External organizations may include third party R&D, testing facilities, customers, suppliers, outsourced manufacturing and others. These many organizations must be managed as a single entity sharing in a single process with a single view of the product and project (with the appropriate security concerns.)
Speeding Time-To-Market requires providing the creative team with appropriate productivity tools. Providing the chemist, flavorist, food engineer, nutritionist, and others with the right tools increases productivity and speeds Time-To-Market. These tools include the ability to identify existing materials or products with appropriate or similar characteristics, formula analysis and balancing tools that help to more efficiently develop the optimal formula, label generation tools to comply with regulatory labeling requirements, and more. In addition, the integration of administrative functions into the processes can minimize unproductive administrative workloads.
Once the final product is approved for commercialization, the task of transferring the product from R&D to full commercial viability is required. Much of this task is a transfer of technology. The product and processes must be transferred to the appropriate system or organization, be they internal or external. The appropriate plant or plants must be selected for production and the product data and processes transferred and implemented. This includes plant and corporate level systems like ERP, SCP, quality, MES and others. Automating the technology transfer is a key weapon in speeding Time-To-Market.
Increasing the Success Rate of New Products
In some markets, like CPG and food, the failure rate of new product introduction is very high, one source places it a 70%. A major motivation for Process PLM is decreasing the rate of failure or increasing the rate of success.
The most obvious way to increase the success rate is to not bring the failures to market. Actually, killing off products or projects that are doomed to failure as early as possible is a key to many objectives. This requires a management approach that looks at all projects and products as a portfolio to be managed together. It requires tools to evaluate the competing projects and products objectively.
These management tools must address the development process itself. Which projects are behind schedule? What are the steps to be initiated once a particular step in the process is approved and who approves. These management processes must be automated thought workflow approaches to define and ensure best practice, reduce handoff times and to allow for clear accountability and continuous improvement.
To be successful, a product must meet the needs of the customer. The marketing organization or customer defines these needs as a set of requirements. These requirements can include final product cost, physical or chemical specifications, customer perceptions and others. These requirements must be used continually to project the success of the product. A key is the early identification of "losers" to maximize the attention spent on the eventual "winners."
SOURCE:-
http://www.technologyevaluation.com/research/articles/product-life-cycle-management-plm-in-process-part-2-process-plm-motivation-16822/
The business strategies reviewed are:
* Accelerating Time-to-Market
* Increasing the success rate of new products
* Increasing the profitability of products
* Increasing return on assets
Accelerating Time-to-Market
Time-To-Market is the delay between an idea, from the marketing department or a customer, to the general availability of the product. The compression of this time leads to greater responsiveness to market demand, greater market share and greater profitability. Time-To-Market can be broken into two periods, idea to final product design and the decision to commercialize the product to its availability on the market. Speeding Time-To-Market encompasses both time periods.
Time-To-Market is not only important for new products. The Director of R&D of a leading food company tells us that 50% of her R&D efforts are for new products. The remaining 50% are on changes to existing products. These changes are demanded from a variety of reasons including cost reduction programs and reacting to changes in raw material supply.
To speed Time-To-Market, a comprehensive approach is required. The business processes involved include many internal and external organizations. Internal organizations often include marketing, R&D, production, quality and others. External organizations may include third party R&D, testing facilities, customers, suppliers, outsourced manufacturing and others. These many organizations must be managed as a single entity sharing in a single process with a single view of the product and project (with the appropriate security concerns.)
Speeding Time-To-Market requires providing the creative team with appropriate productivity tools. Providing the chemist, flavorist, food engineer, nutritionist, and others with the right tools increases productivity and speeds Time-To-Market. These tools include the ability to identify existing materials or products with appropriate or similar characteristics, formula analysis and balancing tools that help to more efficiently develop the optimal formula, label generation tools to comply with regulatory labeling requirements, and more. In addition, the integration of administrative functions into the processes can minimize unproductive administrative workloads.
Once the final product is approved for commercialization, the task of transferring the product from R&D to full commercial viability is required. Much of this task is a transfer of technology. The product and processes must be transferred to the appropriate system or organization, be they internal or external. The appropriate plant or plants must be selected for production and the product data and processes transferred and implemented. This includes plant and corporate level systems like ERP, SCP, quality, MES and others. Automating the technology transfer is a key weapon in speeding Time-To-Market.
Increasing the Success Rate of New Products
In some markets, like CPG and food, the failure rate of new product introduction is very high, one source places it a 70%. A major motivation for Process PLM is decreasing the rate of failure or increasing the rate of success.
The most obvious way to increase the success rate is to not bring the failures to market. Actually, killing off products or projects that are doomed to failure as early as possible is a key to many objectives. This requires a management approach that looks at all projects and products as a portfolio to be managed together. It requires tools to evaluate the competing projects and products objectively.
These management tools must address the development process itself. Which projects are behind schedule? What are the steps to be initiated once a particular step in the process is approved and who approves. These management processes must be automated thought workflow approaches to define and ensure best practice, reduce handoff times and to allow for clear accountability and continuous improvement.
To be successful, a product must meet the needs of the customer. The marketing organization or customer defines these needs as a set of requirements. These requirements can include final product cost, physical or chemical specifications, customer perceptions and others. These requirements must be used continually to project the success of the product. A key is the early identification of "losers" to maximize the attention spent on the eventual "winners."
SOURCE:-
http://www.technologyevaluation.com/research/articles/product-life-cycle-management-plm-in-process-part-2-process-plm-motivation-16822/
Product Life Cycle Management I actually quite interested in this process and find a lot of information kiems, thank you for sharing.
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