What Is Product Life Cycle Management (PLM)?

What Is Product Life Cycle Management (PLM)?

Before you learn how to manage a product life cycle, you must first understand what a product life cycle actually is.

A product life cycle is the process a new product goes through, starting when it is first introduced to consumers and ending when it is taken off the market. It is not to be confused with a project life cycle, which is a more short-term endeavor that often acts as a subset to a product life cycle.

There are four key phases in a typical product life cycle: 

Introduction → Growth → Maturity → Decline

So, what is product life cycle management (PLM)? PLM refers to how the product is handled as it moves through the above phases. This product management process adds a sense of structure that enables organizations to tackle the challenges associated with developing a new product. 

PLM involves the integration of many different departments in a company, including design, engineering, sales, and marketing. It is one of four foundational elements in a manufacturing firm’s IT processes, alongside enterprise resource planning (ERP), supply chain management (SCM), and customer relationship management (CRM).

Examples of PLM activities include idea gathering, materials sourcing, product costing, product design, and quality testing.

The history of PLM

PLM dates back to 1931, when Otto Kleppner, founder of a New York advertising agency, devised the concept of three product life cycle phases: pioneering, competitive, and retentive.

This was later revised in 1957 by a Booz Allen Hamilton employee, who upgraded PLM to five phases: introduction, growth, maturity, saturation, and decline. 

The modern application of PLM began in 1985 with the American Motors Corporation (AMC). The US automaker wanted to accelerate its product development process to keep up with its competitors in the market, despite not having as big a budget. It decided to place a significant emphasis on the product life cycle of its prime products (including Jeep), using computer-aided design and a new communication system to bolster its efforts.

The stages of PLM

To structure product life cycle activities and ensure workflows run smoothly, PLM is often split into three stages:

Beginning of Life

This is when the product is first conceptualized. Teams will identify all product requirements, develop a prototype, initiate market testing, and assess the supply chain.

Middle of Life

Now that the product is developed, teams work on how to distribute and maintain it. They will collect data from end-users to identify any issues and address them. Examples include bug fixes and software updates.

End of Life

If a product is no longer needed by a consumer, it will enter its final phase: retirement. Companies may choose to develop a replacement product based on consumer demand.

Why use PLM?

There are many reasons why an organization will prioritize PLM in its business activities. If implemented effectively, it can: 

• Improve product quality
• Reduce development times
• Cut unnecessary costs
• Boost profitability
• Increase customer impact

Overall, a robust PLM infrastructure can successfully guide an organization as it brings a new product to life.