Product life cycle management
Product life cycle
The product life cycle goes through many phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures; whereas product lifecycle managemen (PLM) has 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. To say that a product has a life cycle is to assert four things: 1) that products have a limited life, 2) product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, 3) profits rise and fall at different stages of product life cycle, and 4) products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.
The different stages in a product life cycle are:
1. Market introduction stage
§ cost high
§ sales volume low
§ no/little competition - competitive manufacturers watch for acceptance/segment growth losses
§ demand has to be created
§ customers have to be prompted to try the product
2. Growth stage
§ costs reduced due to economies of scale and
§ sales volume increases significantly
§ public awareness
§ competition begins to increase with a few new players in establishing market
§ prices to maximize market share
3. Mature stage
§ Costs are very low as you are well established in market & no need for publicity.
§ sales volume peaks
§ increase in competitive offerings
§ prices tend to drop due to the proliferation of competing products
§ brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered
§ Industrial profits go down
4. Saturation and decline stage
§ costs become counter-optimal
§ sales volume decline or stabilize
§ prices, profitability diminish
§ profit becomes more a challenge of production/distribution efficiency than increased sales
A "micro-market" can be used to describe a Walkman, more portable, as well as individually and privately recordable; and then Compact Discs ("CDs") brought increased capacity and CD-R offered individual private recording...and so the process goes. The below section on the "technology lifecycle" is a most appropriate concept in this context. Most of the context is not in English so you may need a translator.
In short, termination is not always the end of the cycle; it can be the end of a micro-entrant within the grander scope of a macro-environment. The auto industry, fast-food industry, petro-chemical industry, are just a few that demonstrate a macro-environment that overall has not terminated even while micro-entrants over time have come and gone.
Lessons of the Product life Cycle (PLC)
It is claimed that every product has a life cycle. It is launched; it grows, and at some point, may die. A fair comment is that - at least in the short term - not all products or services die. Jeans may die, but clothes probably will not. Legal services or medical services may die, but depending on the social and political climate, probably will not.
Even though its validity is questionable, it can offer a useful 'model' for managers to keep at the back of their mind. Indeed, if their products are in the introductory or growth phases, or in that of decline, it perhaps should be at the front of their mind; for the predominant features of these phases may be those revolving around such life and death. Between these two extremes, it is salutary for them to have that vision of mortality in front of them.
However, the most important aspect of product life-cycles is that, even under normal conditions, to all practical intents and purposes they often do not exist (hence, there needs to be more emphasis on model/reality mappings). In most markets the majority of the major brands have held their position for at least two decades. The dominant product life-cycle, that of the brand leaders which almost monopolize many markets, is therefore one of continuity.
In the criticism of the product life cycle, Dhalla & Yuspeh state:
...clearly, the PLC is a dependent variable which is determined by market actions; it is not an independent variable to which companies should adapt their marketing programs. Marketing management itself can alter the shape and duration of a brand's life cycle.
Thus, the life cycle may be useful as a description, but not as a predictor; and usually should be firmly under the control of the marketer. The important point is that in many markets the product or brand life cycle is significantly longer than the planning cycle of the organisations involved. Thus, it offers little practical value for most marketers. Even if the PLC (and the related PLM support) exists for them, their plans will be based just upon that piece of the curve where they currently reside (most probably in the 'mature' stage); and their view of that part of it will almost certainly be 'linear' (and limited), and will not encompass the whole range from growth to decline.
Aspects of product management
Depending on the company size and history, product management has a variety of functions and roles. Sometimes there is a product manager, and sometimes the role of product manager is held by others. Frequently there is Profit and Loss (P&L) responsibility as a key metric for evaluating product manager performance. In some companies, the product management function is the hub of many other activities around the product. In others, it is one of many things that need to happen to bring a product to market.
§ Defining new products
§ Gathering market requirements
§ Building product roadmaps, particularly Technology roadmaps
§ Product Life Cycle considerations
§ Product differentiation
§ more detail on Product planning
§ Product positioning and outbound messaging
§ Promoting the product externally with press, customers, and partners
§ Bringing new products to market
§ Monitoring the competition
§ more detail on Product marketing
New product development
In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process: one involves the idea generation, product design, and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.
Types of new products
There are several general categories of new products. Some are new to the market (ex. DVD players into the home movie market), some are new to the company (ex. Game consoles for Sony), some are completely novel and create totally new markets (ex. the airline industry). When viewed against a different criteria, some new product concepts are merely minor modifications of existing products while some are completely innovative to the company.
§ Changes to Augmented Product
§ Core product revision
§ Line extensions
§ New product lines
§ Completely new
These different characterizations are displayed in the following diagram.
Types of new products
Idea Generation is often called the "fuzzy front end" of the NPD process
§ Ideas for new products can be obtained from basic research using a SWOT analysis (OPPORTUNITY ANALYSIS), Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.
§ Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step).
2. Idea Screening
§ The object is to eliminate unsound concepts prior to devoting resources to them.
§ The screeners must ask at least three questions:
§ Will the customer in the target market benefit from the product?
§ What is the size and growth forecasts of the market segment/target market?
§ What is the current or expected competitive pressure for the product idea?
§ What are the industry sales and market trends the product idea is based on?
§ Is it technically feasible to manufacture the product?
§ Will the product be profitable when manufactured and delivered to the customer at the target price?
3. Concept Development and Testing
§ Develop the marketing and engineering details
§ Who is the target market and who is the decision maker in the purchasing process?
§ What product features must the product incorporate?
§ What benefits will the product provide?
§ How will consumers react to the product?
§ How will the product be produced most cost effectively?
§ Prove feasibility through virtual computer aided rendering, and rapid prototyping
§ What will it cost to produce it?
§ Testing the Concept by asking a sample of prospective customers what they think of the idea. Usually via Choice Modelling.
4. Business Analysis
§ Estimate likely selling price based upon competition and customer feedback
§ Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation
§ Estimate profitability and breakeven point
5. Beta Testing and Market Testing
§ Produce a physical prototype or mock-up
§ Test the product (and its packaging) in typical usage situations
§ Conduct focus group customer interviews or introduce at trade show
§ Make adjustments where necessary
§ Produce an initial run of the product and sell it in a test market area to determine customer acceptance
6. Technical Implementation
§ New program initiation
§ Resource estimation
§ Requirement publication
§ Engineering operations planning
§ Department scheduling
§ Supplier collaboration
§ Logistics plan
§ Resource plan publication
§ Program review and monitoring
§ Contingencies - what-if planning
7. Commercialization (often considered post-NPD)
§ Launch the product
§ Produce and place advertisements and other promotions
§ Fill the distribution pipeline with product
§ Critical path analysis is most useful at this stage
These steps may be iterated as needed. Some steps may be eliminated. To reduce the time that the NPD process takes, many companies are completing several steps at the same time (referred to as concurrent engineering or time to market). Most industry leaders see new product development as a proactive process where resources are allocated to identify market changes and seize upon new product opportunities before they occur (in contrast to a reactive strategy in which nothing is done until problems occur or the competitor introduces an innovation). Many industry leaders see new product development as an ongoing process (referred to as continuous development) in which the entire organization is always looking for opportunities.
For the more innovative products indicated on the diagram above, great amounts of uncertainty and change may exist, which makes it difficult or impossible to plan the complete project before starting it. In this case, a more flexible approach may be advisable.
Because the NPD process typically requires both engineering and marketing expertise, cross-functional teams are a common way of organizing projects. The team is responsible for all aspects of the project, from initial idea generation to final commercialization, and they usually report to senior management (often to a vice president or Program Manager). In those industries where products are technically complex, development research is typically expensive, and product life cycles are relatively short, strategic alliances among several organizations helps to spread the costs, provide access to a wider skill set, and speeds the overall process.
Also, notice that because engineering and marketing expertise are usually both critical to the process, choosing an appropriate blend of the two is important. Observe (for example, by looking at the See also or References sections below) that this article is slanted more toward the marketing side. For more of an engineering slant, see the Ulrich and Eppinger reference below.
People respond to new products in different ways. The adoption of a new technology can be analyzed using a variety of diffusion theories such as the Diffusion of innovations theory.
Fuzzy Front End
The Fuzzy Front End is the messy "getting started" period of new product development processes. It is in the front end where the organization formulates a concept of the product to be developed and decides whether or not to invest resources in the further development of an idea. It is the phase between first consideration of an opportunity and when it is judged ready to enter the structured development process (Kim and Wilemon , 2002; Koen et al., 2001). It includes all activities from the search for new opportunities through the formation of a germ of an idea to the development of a precise concept. The Fuzzy Front End ends when an organization approves and begins formal development of the concept.
Although the Fuzzy Front End may not be an expensive part of product development, it can consume 50% of development time (see Chapter 3 of the Smith and Reinertsen reference below), and it is where major commitments are typically made involving time, money, and the product’s nature, thus setting the course for the entire project and final end product. Consequently, this phase should be considered as an essential part of development rather than something that happens “before development,” and its cycle time should be included in the total development cycle time.
Koen et al. (2001, pp.47-51) distinguish five different front-end elements (not necessarily in a particular order):
1. Opportunity Identification
2. Opportunity Analysis
3. Idea Genesis
4. Idea Selection
5. Concept and Technology Development
The first element is the opportunity identification. In this element, large or incremental business and technological chances are identified in a more or less structured way. Using the guidelines established here, resources will eventually be allocated to new projects.... which then lead to a structured NPPD (New Product & Process Development)strategy. The second element is the opportunity analysis. It is done to translate the identified opportunities into implications for the business and technology specific context of the company. Here extensive efforts may be made to align ideas to target customer groups and do market studies and/or technical trials and research. The third element is the idea genesis, which is described as evolutionary and iterative process progressing from birth to maturation of the opportunity into a tangible idea. The process of the idea genesis can be made internally or come from outside inputs, e.g. a supplier offering a new material/technology, or from a customer with an unusual request. The fourth element is the idea selection. Its purpose is to choose whether to pursue an idea by analyzing its potential business value. The fifth element is the concept and technology development. During this part of the front-end, the business case is developed based on estimates of the total available market, customer needs, investment requirements, competition analysis and project uncertainty. Some organizations consider this to be the first stage of the NPPD process (i.e., Stage 0).
The Fuzzy Front End is also described in literature as "Front End of Innovation", "Phase 0", "Stage 0" or "Pre-Project-Activities".
Software product management
Software product management is the process of managing software that is built and implemented as a product, taking into account lifecycle considerations and generally with a wide audience. This is in contrast to software that is delivered in an ad-hoc manner, typically to a limited clientele, e.g. service.
A software product is typically a single application or suite of applications built by a software company to be used by *many* customers, businesses or consumers. The mass-market notion differs from custom software built for the use of a single customer by consulting firms likeIBM Global Services or Accenture.
Examples of business software products include the Oracle 10g database by Oracle Corporation, SAP R/3 ERP software by SAP AG, QuickBooks by Intuit, etc.
Examples of consumer software products include Microsoft Office by Microsoft, TurboTax by Intuit. Since the late 1990s, many software products have been offered as a service, so that the customers - businesses or end consumers - run the same application without installing the software on their computers. Examples include Customer Relationship Management (CRM) software by Salesforce.com, consumer shopping comparison software by Shopping.com, various web search tools offered by Google, Yahoo!, and the auction marketplace by eBay. Even though these applications are not packaged in media that can be touched and felt, they are software products nonetheless, and require the same product management rigor as packaged software do. In fact, they do require more rigor since the product manager must now be concerned with operational concerns such as service availability and third-party relations.
The need for software product management
To develop, sell and support a successful software product a business needs to understand its market, identify the opportunity, develop and market an appropriate piece of software. Hence the need for product management as a core business function in software companies.
Hardware companies may also have a need for software product management, because software is part of the delivery: for example when providing operating systems or software embedded in a device.
Management of aspects of software development
Software product management deals with the following aspects of software development within a software and/or hardware firm:
§ Idea generation (e.g. on whiteboards) for a new software product, or for the next version of an existing product.
§ Collection and prioritisation (see below) of business and/or market requirements from prospects, customers of earlier versions of the product, domain experts, technology visionaries, market experts, products / solutions from competing vendors, etc.
§ Crafting of Marketing Requirements Documents, or MRDs, which synthesize the requirements / needs of various stakeholders as outlined above.
§ Using the MRD as a basis, come up with a product requirements document or PRD, as an input to the engineering team to build out the product. A PRD is also known as a functional specification. Frequently, a PRD can be a collection of UML Use Cases, UML Activity Diagrams, HTML mockups, etc. It can have other details such as the software development environment, and the software deployment environment (client-server, web, etc.).
§ Deliver the PRD to the software engineering team, and manage conflicts between the business units, the sales teams, and the engineering teams, as it applies to the software products to be built out.
§ Once the software development gets into build / release cycle, conduct acceptance tests.
§ Deal with the delivery of the product. This can vary from demonstrating the product to customers using web-based conferencing tools, to building a flash/captivate demo and deploying it on the company website, to other placement and promotion tactics. Frequently, in Silicon Valley, these two aspects of marketing, and sometimes also pricing, are dealt with by Product Marketing Managers, as opposed to Product Managers.
§ Once the product is deployed at a customer site, solicit customer feedback, report software bugs, and pass these on back to engineering for subsequent build / release cycles, as the product stabilizes, and then matures.
§ Perform competitive analysis as to how this product is behaving in the market, vis-a-vis other products catering to the same / similar customer segments. In the software space, this might require the product manager to take the opinion of analysts, who can come from name brand market research firms like IDC, Forrester Research, and Gartner Group.
§ Solicit more features and benefits from the users of the software product, users of competitive products, and from analysts and craft / synthesize these requirements for subsequent product build / release cycles, and pass them on to the software engineering team.
The above tasks are not sequential, but can co-exist. For Product Managers to be efficient in the above tasks, they have to have both engineering and marketing skills. Hence, frequently, Silicon Valley firms prefer engineers who are also MBAs to do software product management.
A key aspect of Product Management is the correct prioritisation of enhancements. Here's a method that works well (borrowed and adapted from Joel Spolsky):
§ Identify the panel, i.e. whose opinion you are going to seek
§ Make a list of all items
§ Estimate the effort required (either in days or in money) - this needs to be very rough and approximate
§ Add up the total effort, call it E
§ Give the panel members a budget of 0.5 × E each - they can can place this any way they like, including all on a single item
§ Rank the items in terms of the ratio Votes / Estimate
§ Do as many of the items as the actual budget allows, respecting the sequence
Most new technologies follow a similar technology maturity lifecycle describing the technological maturity of a product. This is not similar to a product life cycle, but applies to an entire technology, or a generation of a technology.
Technology adoption is the most common phenomenon driving the evolution of industries along the industry lifecycle. After expanding new uses of resources they end with exhausting the efficiency of those processes, producing gains that are first easier and larger over time then exhaustingly more difficult.
Technology perception dynamics
There is usually technology hype at the introduction of any new technology, but only after some time has passed can it be judged as mere hype or justified true acclaim. Because of the logistic curve nature of technology adoption, it is difficult to see in the early stages whether the hype is excessive.
The two errors commonly committed in the early stages of a technology's development are.
§ fitting an exponential curve to the first part of the growth curve, and assuming eternal exponential growth
§ fitting a linear curve to the first part of the growth curve, and assuming that takeup of the new technology is disappointing
Similarly, in the later stages, the opposite mistakes can be made relating to the possibilities of technology maturity and market saturation.
Technology adoption typically occurs in an S curve, as modelled in diffusion of innovations theory. This is because customers respond to new products in different ways. Diffusion of innovations theory, pioneered by Everett Rogers, posits that people have different levels of readiness for adopting new innovations and that the characteristics of a product affect overall adoption. Rogers classified individuals into five groups: innovators, early adopters, early majority, late majority, and laggards. In terms of the S curve, innovators occupy 2.5%, early adopters 13.5%, early majority 34%, late majority 34%, and laggards 16%.
From a layman's perspective, the technological maturity can be broken down into five distinct stages.
1. Bleeding edge - any technology that shows high potential but hasn't demonstrated its value or settled down into any kind of consensus. Early adopters may win big, or may be stuck with a white elephant.
2. Leading edge - a technology that has proven itself in the marketplace but is still new enough that it may be difficult to find knowledgeable personnel to implement or support it.
3. State of the art - when everyone agrees that a particular technology is the right solution.
4. Dated - still useful, still sometimes implemented, but a replacement leading edge technology is readily available.
5. Obsolete - has been superseded by state-of-the-art technology, maintained but no longer implemented.
Planned obsolescence (also built-in obsolescence in the United Kingdom) is the process of a product becoming obsolete and/or non-functional after a certain period or amount of use in a way that is planned or designed by the manufacturer. Planned obsolescence has potential benefits for a producer because the product fails and the consumer is under pressure to purchase again, whether from the same manufacturer (a replacement part or a newer model), or from a competitor which might also rely on planned obsolescence. The purpose of planned obsolescence is to hide the real cost per use from the consumer, and charge a higher price than they would otherwise be willing to pay (or would be unwilling to spend all at once).
For an industry, planned obsolescence stimulates demand by encouraging purchasers to buy again sooner if they still want a functioning product. Built-in obsolescence is in many different products, from vehicles to light bulbs, from buildings to software. There is, however, the potential backlash of consumers who learn that the manufacturer invested money to make the product obsolete faster; such consumers might turn to a producer, if any, which offers a more durable alternative.
Planned obsolescence was first developed in the 1920s and 1930s when mass production had opened every minute aspect of the production process to exacting analysis.
Estimates of planned obsolescence can influence a company's decisions about product engineering. Therefore the company can use the least expensive components that satisfy product lifetime projections. Such decisions are part of a broader discipline known as value engineering.
The use of planned obsolescence is not always easy to pinpoint, and it is complicated by related problems, such as competing technologies orcreeping featurism which expands functionality in newer product versions.
Rationable behind the strategy
A new product development strategy that seeks to make existing products obsolete may appear counter intuitive, particularly if coming from a leading marketer of the existing products. Why would a firm deliberately endeavour to reduce the value of its existing product portfolio?
The rationale behind the strategy is to generate long-term sales volume by reducing the time between repeat purchases, (referred to as shortening the replacement cycle). Firms that pursue this strategy believe that the additional sales revenue it creates more than offsets the additional costs of research and development and opportunity costs of existing product line cannibalization. However, the rewards are by no means certain: In a competitive industry, this can be a risky strategy because consumers may decide to buy from competitors. Because of this, gaining by this strategy requires fooling the consumers on the actual cost per use of the item in comparison to the competition.
Shortening the replacement cycle has many critics as well as supporters. Critics such as Vance Packard claim the process wastes resourcesand exploits customers. Resources are used up making changes, often cosmetic changes, that are not of great value to the customer. Supporters claim it drives technological advances and contributes to material well-being. They claim that a market structure of planned obsolescence and rapid innovation may be preferred to long-lasting products and slow innovation. In a fast paced competitive industry market success requires that products are made obsolete by actively developing replacements. Waiting for a competitor to make products obsolete is a sure guarantee of future demise.
The main concern of the opponents of planned obsolescence is not the existence of the process, but its possible postponement. They are concerned that technological improvements are not introduced even though they could be. They are worried that marketers will refrain from developing new products, or postpone their introduction because of product cannibalization issues. For example, if the payback period for a product is five years, a firm might refrain from introducing a new product for at least five years even though it may be possible for them to launch in three years. This postponement is only feasible in monopolistic or oligopolistic markets. In more competitive markets rival firms will take advantage of the postponement and launch their own products.
Types of obsolescence
Technical or functional obsolescence
The design of most consumer products includes an expected average lifetime permeating all stages of development. For instance, no auto-parts maker would run the extra cost of ensuring a part lasts for forty years if few cars spend more than five years on the road. Thus, it must be decided early in the design of a complex product how long it is designed to last so that each component can be made to those specifications.
Planned obsolescence is made more likely by making the cost of repairs comparable to the replacement cost, or by refusing to provide service or parts any longer. A product might even never have been serviceable. Creating new lines of products that do not interoperate with older products can also make an older model quickly obsolete, forcing replacement.
Planned functional obsolescence is a type of technical obsolescence in which companies introduce new technology which replaces the old. The old products do not have the same capabilities or functionality as the new ones. For example a company that sold video tape decks while they were developing DVDs was engaging in planned obsolescence. That is, they were actively planning to make their existing product (video tape) obsolete by developing a substitute product (DVDs) with greater functionality (better quality). Associated products that are complementsto the old products will also become obsolete with the introduction of new products. For example video tape holders saw the same fate as video tapes and video tape decks. Likewise, buggy whips became obsolete when people started traveling in cars instead of buggies.
Many portable consumer electronics contain proprietary, often lithium-based batteries. These batteries last only about 500 cycles before losing large amounts of their capacity. Production of these batteries is usually stopped at around the same time the product is discontinued, therefore rendering the product worthless once the batteries start to wear out. While battery packs can be rebuilt and fitted with new cells, this is either too costly or too time consuming for most consumers.
Planned systemic obsolescence is the deliberate attempt to make a product obsolete by altering the system in which it is used in such a way as to make its continued use difficult. For example, new software is frequently introduced that is not compatible with older software. This makes the older software largely obsolete. For example, even though an older version of a word processing program is operating correctly, it might not be able to read data saved by newer versions. The lack of interoperability forces many users to purchase new programs prematurely. The greater the network externalities in the market, the more effective this strategy is.
Another way of introducing systemic obsolescence is to eliminate service and maintenance for a product. If a product fails, the user is forced to purchase a new one. This strategy seldom works because there are typically third parties that are prepared to perform the service if parts are still available. One place it does work is in proprietary software, where copyright forbids third parties from performing some kinds of service. One example of this type of obsolescence is Microsoft's termination of support for Windows 98 and earlier versions of Windows. Similarly, Apple Inc.'s introduction of Mac OS X (post-purchase of NeXT in 1997), which is Unix-based and incompatible with previous versions of the company's operating systems (although a compatibility layer was provided for several years).
Marketing may be driven primarily by aesthetic design. Product categories in which this is the case display a fashion cycle. By continually introducing new designs and retargeting or discontinuing others, a manufacturer can "ride the fashion cycle". Examples of such product categories include automobiles (style obsolescence), with a strict yearly schedule of new models, and the almost entirely style-driven clothingindustry (riding the fashion cycle) and the mobile phone industries with constant minor feature 'enhancements' and restyling.
Planned style obsolescence occurs when marketers change the styling of products so customers will purchase products more frequently. The style changes are designed to make owners of the old model feel "out of date". It is also designed to differentiate the product from the competition, thereby reducing price competition. One example of style obsolescence is the automobile industry, in which manufacturers typically make style changes every year or two. As the former CEO of General Motors Alfred P. Sloan stated in 1941, "Today the appearance of a motorcar is a most important factor in the selling end of the business—perhaps the most important factor— because everyone knows the car will run."
Some marketers go one step further: they attempt to initiate fashions or fads. A fashion is any style that is popularly accepted by groups of people over a period of time. A fad is a short term fashion. Examples of successfully created fashions or fads include Beanie Babies, Ninja Turtles, Cabbage Patch Kids, pet rocks, acid wash jeans, and tank tops. Obsolescence is built into these products in the sense that marketers are aware of the shortness of their product life cycles so they work within that constraint. For example, when Beanie Babies sales revenue started to decline, company president Ty Warner astutely decided to go for one last Christmas marketing push and then drop the product.
Another strategy is to take advantage of fashion changes, often called the fashion cycle. The fashion cycle is the repeated introduction, rise, popular culmination, and decline of a style as it progresses through various social strata. Marketers can "ride the fashion cycle" by changing the mix of products that they direct at various market segments. This is very common in the clothing industry. A certain style of dress, for example, will initially be aimed at a very high income segment, then gradually be re-targeted to lower income segments. The fashion cycle can repeat itself, in which case a stylistically obsolete product may regain popularity and cease to be obsolete.
Some companies have developed a very sophisticated version of obsolescence in which the product informs the user when it is time to buy a replacement. Examples of this include water filters that display a replacement notice after a predefined time and disposable razors that have a strip that changes colour. If the user is notified before the product has actually deteriorated, planned obsolescence is the result. In this way obsolescence can be introduced without going to the expense of developing a new replacement product.
Economics of planned obsolescene
Planned obsolescence tends to work best when a producer has at least an oligopoly. Before introducing a planned obsolescence the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence, there is an information asymmetry between the producer, who knows how long the product was designed to last, and the consumer, who does not. When a market becomes more competitive, product lifespans tend to increase. When Japanese and European vehicles with longer lifespans entered the American market in the 1960s and 1970s, the American carmakers were forced to respond by building more durable products.
However, there are some industries where there is significant competition and consumers have chosen to go for products that will fail more quickly anyway.
Even in a situation where planned obsolescence is appealing to both producer and consumer there can also be significant harm to society in the form of negative externalities. Continuously replacing, rather than repairing products, creates more waste, pollution, and uses more natural resources.
Others have defended planned obsolescence as a necessary driving force behind innovation and economic growth. Many products, such asDVDs, become both cheaper and more useful the more people have them. Planned obsolescence will also tend to benefit those companies with the most modern and up-to-date products, thus encouraging extra investment in research and development that often has large positive externalities.
Obsolescene and durability
If marketers expect a product to become obsolete they can design it to last for a specific lifetime. For example, if a product will be technically or stylistically obsolete in five years, many marketers will design the product so it will only last for that time. This is done through a technical process called value engineering. An example is home entertainment electronics which tend to be designed and built with moving components like motors and gears that last until technical or stylistic innovations make them obsolete.
These products could be built with higher-grade components, but they are not because it is felt that this imposes an unnecessary cost on the purchaser. Value engineering will reduce the cost of making the product and lower the price to consumers. A company will typically use the least expensive components that satisfy product’s lifetime projections.
The use of value engineering techniques have led to planned obsolescence being associated with product deterioration and inferior quality. Vance Packard claimed that this could give engineering a bad name, because it directed creative engineering energies toward short-term market ends rather than more lofty and ambitious engineering goals.
In the United Kingdom, planned obsolescence engineered into products is considered a breach of customer rights. The Office of Fair Tradingand Trading Standards Institute investigate claims of products constantly failing just outside the warranty period. A famous case of this was the 'Click Wheel' Apple iPod, which many consumers found to fail within 18 months of purchase.
Origins of the term
Origins of planned obsolescence go back at least as far as 1932 with Bernard London's Ending the Depression Through Planned Obsolescence. However, the phrase was first popularized in 1954 by Brooks Stevens, an American industrial designer. Stevens was due to give a talk at an advertising conference in Minneapolis in 1954. Without giving it much thought he used the term as the title of his talk.
From that point on, "planned obsolescence" became Stevens' catchphrase. By his definition, planned obsolescence was "Instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary."
Stevens' term was taken up by others, and his own definition was challenged. By the late 1950s, planned obsolescence had become a commonly used term for products designed to break easily or to quickly go out of style. In fact, the concept was so widely recognized that, in 1959, Volkswagen mocked it in a now-legendary advertising campaign. While acknowledging the widespread use of planned obsolescence among automobile manufacturers, Volkswagen pitched itself as an alternative. "We do not believe in planned obsolescence," the ads suggested. "We don't change a car for the sake of change."
In 1960, cultural critic Vance Packard published The Waste Makers, promoted as an exposé of "the systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals."
Packard divided Planned Obsolescence into two sub categories: obsolescence of desirability and obsolescence of function. "Obsolescence of desirability", also called "psychological obsolescence", referred to marketers' attempts to wear a product out in the owner's mind. Packard quoted industrial designer George Nelson, who wrote: "Design... is an attempt to make a contribution through change. When no contribution is made or can be made, the only process available for giving the illusion of change is 'styling.'"
Extending the Product Life Cycle
When a product reaches the maturity stage of the Product life cycle a company may choose to operate strategies to extend the life of the product. If the product is predicted to continue to be successful or an upgrade is soon to be released the company can use various methods to keep sales, else the product will be left as is to continue to the decline stage.
Examples of extension strategies are:
§ Discounted price
§ Increased advertising
Another strategy is added value.
This is a widely used extension strategy. Large companies, in particular food producers, will slightly alter a product to make it seem new and attract new attention to the product. An example being a soft drink company producing a limited edition flavour of the product. This renews sales levels and gives the product continuing interest.
Launch in new markets
Along with the other options,companies can also look at new markets for their old products to extend the PLC, a classical example here would be Toyota's Qualis which was close to being obsolete in its major markets worldwide was launched in india and turned out to one of the biggest hits, thus extending its PLC
An important aspect of design for mechanical, electrical, thermal, chemical or other application is selection of the best material or materials. Systematic selection of the best material for a given application begins with properties and costs of candidate materials. For example, a thermal blanket must have poor thermal conductivity in order to minimize heat transfer for a given temperature difference.
Systematic selection for applications requiring multiple criteria is more complex. For example, a rod which should be stiff and light requires a material with high Young's modulus and low density. If the rod will be pulled in tension, the specific modulus, or modulus divided by densityE / ρ, will determine the best material. But because a plate's bending stiffness scales as its thickness cubed, the best material for a stiff and light plate is determined by the cube root of stiffness divided density .
Ashby plot of density and Young's modulus.
An Ashby plot, named for Michael Ashby of Cambridge University, is a scatter plot which displays two or more properties of many materials or classes of materials. An Ashby plot useful for the example of the stiff, light part discussed above would have Young's modulus on one axis and density on the other axis, with one data point on the graph for each candidate material. On such a plot, it is easy to find not only the material with the highest stiffness, or that with the lowest density, but that with the best ratio E / ρ. Using a log scale on both axes facilitates selection of the material with the best plate stiffness .
The first Ashby plot on the right shows density and Young's modulus, without a log scale. Metals are represented by blue squares, ceramics by green, and polymers by red. It was generated by the Material Grapher.
Plot using Ashby's own CES Selector software.
The second plot shows the same materials attributes for a database of approx 100 materials. Materials families (polymers, foams, metals, etc.) are identified by the larger colored bubbles. The is image is created using Prof Mike Ashby's own CES Selector software and data from Granta Design
Cost of materials plays a very significant role in their selection. The most straightforward way to weight cost against properties is to develop a monetary metric for properties of parts. For example, life cycle assessment can show that the net present value of reducing the weight of a car by 1 kg averages around $5, so material substitution which reduces the weight of a car can cost up to $5 per kilogram of weight reduction more than the original material. However, the geography- and time-dependence of energy, maintenance and other operating costs, and variation in discount rates and usage patterns (distance driven per year in this example) between individuals, means that there is no single correct number for this. For commercial aircraft, this number is closer to $450/kg, and for spacecraft, launch costs around $20,000/kg dominate selection decisions.
Thus as energy prices have increased and technology has improved, automobiles have substituted increasing amounts of light weightmagnesium and aluminium alloys for steel, aircraft are substituting carbon fiber reinforced plastic and titanium alloys for aluminium, andsatellites have long been made out of exotic composite materials.
Of course, cost per kg is not the only important factor in material selection. An important concept is 'cost per unit of function'. For example, if the key design objective was the stiffness of a plate of the material, as described in the introductory paragraph above, then the designer would need a material with the optimal combination of density, Young's modulus, and price. Optimizing complex combinations of technical and price properties is a hard process to achieve manually, so rational material selection software is an important tool.
Toolkits for User Innovation
Toolkits for user innovation (the process) is an innovation process in which the user itself does part of the innovation within a set environment. The process was formalized by Eric von Hippel in the article PERSPECTIVE: User toolkits for innovation and it is based on his belief in innovation made by lead users. The process is based on the idea that manufacturers possess the knowledge of the solution possibilities, while the users possess the knowledge about needs. This information is sticky and can therefore not be transferred easily between the user and the manufacturer.
The process can be used in a variety of settings, and has been shown to be applicable in systems ranging from production of electronic circuitry to Apache security software.
Learning by trial-and-error
It is important that the user is able to go through complete trial-and-error cycles when designing the product. This allows the users to see the consequences of the design choices they make, and thereby decide more precisely what they really want. Trial-and-error has been shown by research to be the way that most problem solving is done.
An appropriate solution space
A solution space is defined by the flexibility in which the producer can produce the desired result. Any production process has a set of limiting factors, and these factors define the solution space. If the solution space is small, the chance of user innovations are small.
A user friendly toolkit
The process must be available to the users so that they can use the skills and languages they already know. This frees the users from learning the different design-specific skills and languages associated with manufacturing.
Commonly used modules
Custom designs are seldom made up of unique parts, but instead share a set of standard modules. Therefore a library of standard modules should be available to the user. This allows the user to focus on the unique parts that are truly important.
Results easily created
The result from the process must be easily converted into the language needed for the production system, and be without error. If the result of the process must be manually translated much of the effect of the toolkit may be lost.
Application lifecycle management
Application lifecycle management (ALM) is the marriage of business management to software engineering made possible by tools that facilitate and integrate requirements management, architecture, coding, testing, tracking, and release management.
Proponents of application lifecycle management claim that it
§ Increases productivity, as the team shares best practices for development and deployment, and developers need focus only on current business requirements
§ Improves quality, so the final application meets the needs and expectations of users
§ Breaks boundaries through collaboration and smooth information flow
§ Accelerates development through simplified integration
§ Cuts maintenance time by synchronizing application and design
§ Maximizes investments in skills, processes, and technologies
§ Increases flexibility by reducing the time it takes to build and adapt applications that support new business initiatives
Categories Of ALM Tools
A representation of the ALM concepts.
As application development has evolved over time, more and more tools have been introduced. Initially, software development was supported with individual point tools, and then simple suites of tools emerged with loose integrations. Now we have modern comprehensive lifecycle tools that are fully integrated and provide capabilities for most of the roles in ALM. The most recent innovation is the discussion around ALM 2.0 which describes a vision for the application development infrastructure needed to meet the needs of the most modern development communities.
As the complexity and sophistication of the software development task has grown it has been matched by increasing numbers of tools. The initial set of tools started with version control tools at the heart of the lifecycle and have grown out from there. Though there is no industry definition of what constitutes and what does not constitute an ALM tool, and the list gets longer every day, the generally accepted categories include:
§ Requirements visualization
§ Requirements management
§ Feature management
§ Project Management
§ Change management
§ Configuration Management
§ Build management
§ Release Management
§ Software Deployment
§ Issue management
§ Monitoring and reporting
The Integrated Development Environment (IDE) is evolving; tool vendors are increasingly integrating their products to deliver suites. IDEs are giving way to tools that reach outside of pure coding and into the architectural, deployment, and management phases of an application’s lifecycle: Application Lifecycle Management. The hallmark of these suites is a common user interface, meta model, and process engine that also enable ALM team members to communicate using standards-based architectures and technologies such as Unified Modeling Language(UML).
ALM Tools and Vendors
Borland Management Solutions
Team Demand - Demand Management
Team Focus - Project Management
Team Analytics - Metrics/Reporting and Visibility
Caliber Analyst - Requirements Definition and Management
Silk Suite - Test Management, Functional and Performance Testing
StarTeam - Change and Configuration Management
HP Quality Center
Rational Team Concert
Endeavour software factory
Visual Studio Team System
Application Development Management
Incident Management Solution
Issue Management Solution
Polarion Software Inc.
Kovair Global Lifecycle
Product lifecycle 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. PLM integrates people, data, processes and business systems and provides a product information backbone for companies and their extended enterprise.
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), their suppliers (SCM-Supply Chain Management), their resources within the enterprise (ERP-Enterprise Resource Planning) and their planning (SDLC-Systems Development Life Cycle). In addition, manufacturing engineering companies must also develop, describe, manage and communicate information about their products.
Documented benefits 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 (PLCM) 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 PLM there are four primary areas;
1. Product and Portfolio Management (PPM)
2. Product Design (CAx)
3. Manufacturing Process Management (MPM)
4. Product Data Management (PDM)
Note: While application software is not required for PLM processes, the business complexity and rate of change requires organizations execute as rapidly as possible.
Product Data Management is focused on capturing and maintaining information on products and/or services through their development and useful life. Product and Portfolio Management is focused on managing resource allocation, tracking progress vs. plan for projects in the new product development projects that are in process (or in a holding status). Portfolio management is a tool that assists management in tracking progress on new products and making trade-off decisions when allocating scarce resources.
Introduction to development process
The core of PLM (product lifecycles managements) is in the creations and central management of all product data and the technology used to access this information and knowledge. PLM as a discipline emerged from tools such as CAD, CAM and PDM, but can be viewed as the integration of these tools with methods, people and the processes through all stages of a product’s life. It is not just about software technology but is also a business strategy.
For simplicity the stages described are shown in a traditional sequential engineering workflow. The exact order of event and tasks will vary according to the product and industry in question but the main processes are:
§ Concept design
§ Detailed design
§ Validation and analysis (simulation)
§ Tool design
§ Plan manufacturing
§ Test (quality check)
§ Sell and Deliver
§ Maintain and Support
The major key point events are:
§ Design freeze
The reality is however more complex, people and departments cannot perform their tasks in isolation and one activity cannot simply finish and the next activity start. Design is an iterative process, often designs need to be modified due to manufacturing constraints or conflicting requirements. Where exactly a customer order fits into the time line depends on the industry type, whether the products are for example Build to Order, Engineer to Order, or Assemble to Order.
Inspiration for the burgeoning business process now known as PLM came when American Motors Corporation (AMC) was looking for a way to speed up its product development process to compete better against its larger competitors in 1985, according to François Castaing, Vice President for Product Engineering and Development. After introducing its compact Jeep Cherokee (XJ), the vehicle that launched the modernsport utility vehicle (SUV) market, AMC began development of a new model, that later came out as the Jeep Grand Cherokee. The first part in its quest for faster product development was computer-aided design (CAD) software system that make engineers more productive. The second part in this effort was the new communication system that allowed conflicts to be resolved faster, as well as reducing costly engineering changes because all drawings and documents were in a central database. The product data management was so effective, that after AMC was purchased by Chrysler, the system was expanded throughout the enterprise connecting everyone involved in designing and building products. While an early adopter of PLM technology, Chrysler was able to become the auto industry's lowest-cost producer, recording development coststhat were half of the industry average by the mid-1990s.
Phases of product lifecycle and corresponding technologies
Many software solutions have developed to organize and integrate the different phases of a product’s lifecycle. PLM should not be seen as a single software product but a collection of software tools and working methods integrated together to address either single stages of the lifecycle or connect different tasks or manage the whole process. Some software providers cover the whole PLM range while others a single niche application. Some applications can span many fields of PLM with different modules within the same data model. An overview of the fields within PLM is covered here. It should be noted however that the simple classifications do not always fit exactly, many areas overlap and many software products cover more than one area or do not fit easily into one category. It should also not be forgotten that one of the main goals of PLM is to collect knowledge that can be reused for other projects and to coordinate simultaneous concurrent development of many products. It is about business processes, people and methods as much as software application solutions. Although PLM is mainly associated withengineering tasks it also involves marketing activities such as Product Portfolio Management (PPM), particularly with regards to New product introduction (NPI).
Phase 1: Conceive
Imagine, Specify, Plan, Innovate
The first stage in idea is the definition of its requirements based on customer, company, market and regulatory bodies’ viewpoints. From this a specification of the products major technical parameters can be defined. Parallel to the requirements specification the initial concept design work is carried out defining the visual aesthetics of the product together with its main functional aspects. For the Industrial Design, Styling, work many different media are used from pencil and paper, clay models to 3D CAID Computer-aided industrial design software.
Phase 2: Design
Describe, Define, Develop, Test, Analyze and Validate
This is where the detailed design and development of the product’s form starts, progressing to prototype testing, through pilot release to full product launch. It can also involve redesign and ramp for improvement to existing products as well as planned obsolescence. The main tool used for design and development is CAD Computer-aided design. This can be simple 2D Drawing / Drafting or 3D Parametric Feature Based Solid/Surface Modelling, Such software includes technology such as Hybrid Modeling, Reverse Engineering, KBE (Knowledge-Based Engineering), NDT (Nondestructive testing), Assembly construction.
This step covers many engineering disciplines including: Mechanical, Electrical, Electronic, Software (embedded), and domain-specific, such as Architectural, Aerospace, Automotive, ... Along with the actual creation of geometry there is the analysis of the components and product assemblies. Simulation, validation and optimization tasks are carried out using CAE (Computer-aided engineering) software either integrated in the CAD package or stand-alone. These are used to perform tasks such as:- Stress analysis, FEA (Finite Element Analysis); Kinematics;Computational fluid dynamics (CFD); and mechanical event simulation (MES). CAQ (Computer-aided quality) is used for tasks such as Dimensional Tolerance (engineering) Analysis. Another task performed at this stage is the sourcing of bought out components, possibly with the aid of Procurement systems.
Phase 3: Realize
Manufacture, Make, Build, Procure, Produce, Sell and Deliver
Once the design of the product’s components is complete the method of manufacturing is defined. This includes CAD tasks such as tool design; creation of CNC Machining instructions for the product’s parts as well as tools to manufacture those parts, using integrated or separate CAM Computer-aided manufacturing software. This will also involve analysis tools for process simulation for operations such as casting, molding, and die press forming. Once the manufacturing method has been identified CPM comes into play. This involves CAPE (Computer-aided Production Engineering) or CAP/CAPP – (Production Planning) tools for carrying out Factory, Plant and Facility Layout and Production Simulation. For example: Press-Line Simulation; and Industrial Ergonomics; as well as tool selection management. Once components are manufactured their geometrical form and size can be checked against the original CAD data with the use of Computer Aided Inspection equipment and software. Parallel to the engineering tasks, sales product configuration and marketing documentation work will be taking place. This could include transferring engineering data (geometry and part list data) to a web based sales configurator and other Desktop Publishingsystems.
Phase 4: Service
Use, Operate, Maintain, Support, Sustain, Phase-out, Retire, Recycle and Disposal
The final phase of the lifecycle involves managing of in service information. Providing customers and service engineers with support information for repair and maintenance, as well as waste management/recycling information. This involves using such tools as Maintenance, Repair and Operations Management (MRO) software.
All phases: product lifecycle
Communicate, Manage and Collaborate
None of the above phases can be seen in isolation. In reality a project does not run sequentially or in isolation of other product development projects. Information is flowing between different people and systems. A major part of PLM is the co-ordination of and management of product definition data. This includes managing engineering changes and release status of components; configuration product variations; document management; planning project resources and timescale and risk assessment.
For these tasks graphical, text and metadata such as product bills of materials (BOMs) needs to be managed. At the engineering departments level this is the domain of PDM – (Product Data Management) software, at the corporate level EDM (Enterprise Data Management) software, these two definitions tend to blur however but it is typical to see two or more data management systems within an organization. These systems are also linked to other corporate systems such as SCM, CRM, and ERP. Associated with these system are Project Management Systems for Project/Program Planning.
This central role is covered by numerous Collaborative Product Development tools which run throughout the whole lifecycle and across organizations. This requires many technology tools in the areas of Conferencing, Data Sharing and Data Translation. The field being Product visualization which includes technologies such as DMU (Digital Mock-Up), Immersive Virtual Digital Prototyping (virtual reality) and Photo realistic Imaging.
The broad array of solutions that make up the tools used within a PLM solution-set (e.g., CAD, CAM, CAx...) were initially used by dedicated practitioners who invested time and effort to gain the required skills. Designers and engineers worked wonders with CAD systems, manufacturing engineers became highly skilled CAM users while analysts, administrators and managers fully mastered their support technologies. However, achieving the full advantages of PLM requires the participation of many people of various skills from throughout an extended enterprise, each requiring the ability to access and operate on the inputs and output of other participants.
Despite the increased ease of use of PLM tools, cross-training all personnel on the entire PLM tool-set has not proven to be practical. Now, however, advances are being made to address ease of use for all participants within the PLM arena. One such advance is the availability of “role” specific user interfaces. Through Tailorable UIs, the commands that are presented to users are appropriate to their function and expertise.
Product development processes and methodologies
A number of established methodologies have been adopted by PLM and been further advanced. Together with PLM digital engineering techniques, they have been advanced to meet company goals such as reduced time to market and lower production costs. Reducing lead times is a major factor as getting a product to market quicker than the competition will help with higher revenue and profit margins and increase market share.
These techniques include:-
§ Concurrent engineering workflow
§ Industrial Design
§ Bottom-up design
§ Top-down design
§ Front loading design workflow
§ Design in context
§ Modular design
§ NPD New product development
§ DFSS Design for Six Sigma
§ DFMA Design for manufacture / assembly
§ Digital simulation engineering
§ Requirement driven design
§ Specification managed validation
Concurrent engineering workflow
Concurrent engineering (British English: simultaneous engineering) is a workflow that instead of working sequentially through stages, carries out a number of tasks in parallel. For example: starting tool design before the detailed designs of the product are finished, or the engineer starting on detail design solid models before the concept design surfaces models are complete. Although this does not necessarily reduce the amount of manpower required for a project, it does drastically reduce lead times and thus time to market. Feature based CAD systems have for many years allowed the simultaneous work on 3D solid model and the 2D drawing by means of 2 separate files, with the drawing looking at the data in the model; when the model changes the drawing will associatively update. Some CAD packages also allow associative copying of geometry between files. This allows, for example, the copying of a part design into the files used by the tooling designer. The manufacturing engineer can then start work on tools before the final design freeze; when a design changes size or shape the tool geometry will then update. Concurrent engineering also has the added benefit of providing better and more immediate communication between departments, reducing the chance of costly, late design changes. It adopts a problem prevention method as compared to the problem solving and re-designing method of traditional sequential engineering.
Bottom-up design (CAD Centric) is where the definition of 3D models of a product starts with the construction of individual components. These are then virtually brought together in sub-assemblies of more than one level until the full product is digitally defined. This is sometimes known as the review structure showing what the product will look like. The BOM contains all of the physical (solid) components; it may (but not also) contain other items required for the final product BOM such as paint, glue, oil and other materials commonly described as 'bulk items'. Bulk items typically have mass and quantities but are not usually modelled with geometry.
Top-down design (Part Centric) follows closer the true design process. This starts with a layout model, often a simple 2D sketch defining basic sizes and some major defining parameters. Industrial Design, brings creative ideas to product development. Geometry from this is associatively copied down to the next level, which represents different sub-systems of the product. The geometry in the sub-systems is then used to define more detail in levels below. Depending on the complexity of the product, a number of levels of this assembly are created until the basic definition of components can be identified, such as position and principal dimensions. This information is then associatively copied to component files. In these files the components are detailed; this is where the classic bottom-up assembly starts. The top down assembly is sometime known as a control structure. If a single file is used to define the layout and parameters for the review structure it is often known as a skeleton file.
Defence engineering traditionally develops the product structure from the top down. The system engineering process prescribes a functional decomposition of requirements and then physical allocation of product structure to the functions. This top down approach would normally have lower levels of the product structure developed from CAD data as a bottom up structure or design.
Front loading design and workflow
Front loading is taking top-down design to the next stage. The complete control structure and review structure, as well as downstream data such as drawings, tooling development and CAM models, are constructed before the product has been defined or a project kick-off has been authorized. These assemblies of files constitute a template from which a family of products can be constructed. When the decision has been made to go with a new product, the parameters of the product are entered into the template model and all the associated data is updated. Obviously predefined associative models will not be able to predict all possibilities and will require additional work. The main principle is that a lot of the experimental/investigative work has already been completed. A lot of knowledge is built into these templates to be reused on new products. This does require additional resources “up front” but can drastically reduce the time between project kick-off and launch. Such methods do however require organizational changes, as considerable engineering efforts are moved into “offline” development departments. It can be seen as an analogy to creating a concept car to test new technology for future products, but in this case the work is directly used for the next product generation.
Design in context
Individual components cannot be constructed in isolation. CAD; CAiD models of components are designed within the context of part or all of the product being developed. This is achieved using assembly modelling techniques. Other components’ geometry can be seen and referenced within the CAD tool being used. The other components within the sub-assembly, may or may not have been constructed in the same system, their geometry being translated from other CPD formats. Some assembly checking such as DMU is also carried out using Product visualizationsoftware.
In 2008, following the revolution around Web 2.0, one of the key commercial players in PLM introduced the notion of PLM 2.0, which encompasses a social community approach to PLM.
PLM 2.0 is about reuse of Web 2.0 like terminology and concept in the domain of PLM. More than a technology, it is a philosophy where:
§ PLM applications are web-based (Software as a Service)
§ PLM applications focus on online collaboration, collective intelligence and online communities
§ PLM expands to new usages like crowdsourcing and real world web, extending the reach PLM outside the enterprise
§ PLM business processes can easily be activated, configured and used, with online access
Currently, PLM 2.0 is still more an idea and a concept than a reality. But more and more PLM offering will embrace the concepts that has been listed here.
Product and process lifecycle management (PPLM)
Product and process lifecycle management (PPLM) is an alternate genre of PLM in which the process by which the product is made is just as important as the product itself. Typically, this is the life sciences and advanced specialty chemicals markets. The process behind the manufacture of a given compound is a key element of the regulatory filing for a new drug application. As such, PPLM seeks to manage information around the development of the process in a similar fashion that baseline PLM talks about managing information around development of the product.
Major commercial players
Total spending on PLM software and services is estimated to be above $15 billion a year but it is difficult to find any two market analysis reports that agree on figures. Market growth estimates are in the 10% area.
Looking at segment split, currently most of the revenue generated is in the area of EDA and high end MCAD (each above 15%), followed by AEC, low-end MCAD, and PDM (each above 10%). The other notable segment is CAE at above 5%. It is however predicted that the collaborative PDM and visualization areas will increase in dominance.
There are many companies that supply software to support the PLM process; the largest by revenue are mentioned here. Some companies such as Dassault Systèmes ($1.7B), Siemens PLM Software ($1.4B), PTC ($1.0B), Agile Software Corporation (now part of Oracle Corporation) and SofTech, Inc. (.011B) provide software products that cover most of the areas of PLM functionality; some companies for example MSC Software($0.3B), Altair Engineering ($0.15B) and Wrench Solutions provide packages specializing in specific topics. One company, Aras Corpoffers Microsoft-based open source enterprise PLM solutions, and both Datastay Corp. and Arena Solutions, provide on-demand PLM (Software as a service) solutions. KnowledgeBench provides web-based PLM applications that are used by pharmaceutical and food and beverage manufacturers. Additional unique offerings include Selerant which specializes only in the process industry and provides formulation optimization and regulatory management. Also, Datastay PLM, as well as Omnify Software's PLM, incorporate traditionally disparate systems (quality, training, corrective action/preventive action) to augment support for regulatory compliance across all verticals. Other companies provide web-based PLM solutions mainly for apparel, footwear, accessories, and consumer brand manufacturers, including Centric Softwareand ecVision .
Independent PLM solution providers such as Satyam (SAY) ,Atos Origin, SIA Conseil, accenture, Infosys, Integware and Metafore deliver PLM consulting and system integration services and help companies to identify, design, implement and operate appropriate PLM practices, processes and technologies.
There are also companies whose main revenue is not from PLM but do attribute some of their income from PLM software, such as SAP($11B),SSA Global , Oracle Corporation and Autodesk ($1.5B). Other companies in this market, such as Satyam (SAY) ,Atos Origin, IBM ($88.9B),EDS ($19.8B),NEC ($45B), Accenture, Infosys (INFY), Geometric, Tata Consultancy Services (TCS) ,WRENCH Solutions (P) Ltd,ITC Infotechprovide outsourcing and consulting services some of which is in the field of PLM. 3DPLM is a joint venture between Dassault systeme and Geometric to develop specialised PLM solutions.
Many of these companies have emerged out of the CAD and PDM market. For a more comprehensive list see List of CAD companies.