Getting Value out of Product Lifecycle Management

Getting Value out of Product
Lifecycle Management

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The market value of a
Efficient management of PLM within the • Operational view: A product
company is typically
company requires considering different
shouldn’t only be considered as
management views in mind:
a physical being with technical
measured by its capacity to
• Strategic view: This is probably the
features but a composite of customer
generate profitable growth;
most important view, and is related
requirements, cost, safety issues,
and this is directly linked to
to defining specific guidelines about
aesthetic aspects and technical
specifications to respond to customer
the ability to innovate and
developing products in markets and
categories where the company is
insight, manufacturing and logistics
launch successful products
focused on growth, and also creating
process requirements, target product
or services to the market.
a suitable mix of product/service
costs, safety use along the supply
innovation required for those markets.
chain, regulatory compliance, risk
Product Lifecycle Management (PLM)
Product Portfolio Management is
management, and so on. The more
concept has emerged during the last
one capability that is critical to
elements considered the more
decade out of the fields such as product
ensure that the company defines and
efficient and consistent the product
data management and business process
monitors the required products to
lifecycle management at the company
management in product development to
achieve future target revenues and
wil be.
respond to the above mentioned needs.
profits.
In its conception, PLM was perceived as
• Tactical view: Once the PLM strategy
a set of technologies used for capturing
has been set in the company, aligning
and maintaining product information
the product related activities and
across the entire life cycle of the product.
cultural mindset with the objectives
However, PLM, in its essence is a broader
and direction of the firm becomes
concept and should be looked more as
the next fundamental issue. Project
a set of capabilities, encompassing
Portfolio Management and Project
strategy, organization, processes and
Management help driving the actions
also technological aspects which
which are required to ensure working
support a company and its partners to
on the right projects and doing them
create and launch successful products,
right.
and manage their lifecycles to obtain
maximum profitability.


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If we look at the market,
phase is validated. Standardization of
we can find examples on
product specification management
processes, tight integration of Product
how different companies
Data Management with the ERP, and
are approaching PLM
alignment of the objectives of R&D and
Operations (e.g. manufacturing, quality,
Chemicals manufacturers have been
logistics and so on) help improve
concentrating during the last years on
product information consistency
product cost and safety issues, mainly
while enabling higher coordination
driven by challenges related to cost
for executing faster cross-functional
reduction and increasing regulations
activities. As a result, those actions
(e.g. REACH in Europe). One example
improve product safety (e.g. for doing
is a manufacturing company that
product changes or applying CSR
has been working in an initiative to
policies) and help reduce Time to
strategically improve its compliance
Market.
Another client of us, a major player in
capabilities by means of more efficient
Electronics and High Tech industry,
Industrial Equipment companies
product information management.
couldn’t respond to rapid pace of
have other concerns than time to
Global product specification
technology change and customer
market. Looking to respond to the
management, process standardization
requirements with the internal R&D
industry challenges (e.g. margin
and rationalization (centralization of
resources. Their scope of the problems,
pressures, changes in technologies),
activities, outsourcing, etc) have helped
so, is at the strategic level and open
recent merger and acquisitions
this company reduce the product cost
innovation structure has been used
have resulted in companies with
(e.g. by supplier consolidation), increase
as a response to this challenge. The
disperse R&D organization. As a
safety at the workplace and reduce
company has created a hub in its
consequence, reorganization of the
the number of non-compliance costs
R&D organization to collaborate with
engineering function, with a logic
(insurance, penalties and so on).
external entities, including customers,
similar to  together is more that
suppliers and other third party
the sum of the , and R&D/product
players. The company has also put a
cost reduction activities are examples
collaborative project management
of the movements in this sector. In
system in place in order to manage
this respect, one leading company in
these activities as well. Open Innovation
Europe recently launched an initiative
and Web .0-based technologies help
to reorganize its R&D and align all
such companies to benefit from higher
the efforts related to technology,
level of collaboration, not only with
new product development and
their suppliers and clients but with an
modifications with the rest of the
extended network of innovators and
company’s strategy. Common and
problem solvers in an efficient way and
state of the art methodologies for
also take advantage of the wisdom of
new product development, project
crowds.
portfolio management and systems to
enable virtual project teams help these
Consumer goods, on the other hand,
companies speak the same language
is a sector where obtaining consumer
related to product activities, select the
insight and doing fast product
right projects under a single Product
development are of great importance.
Strategy and work more efficiently
As an example, another company in
altogether despite geographical
this sector wanted to provide healthy
constraints.
and safer products to its customers
based on strategic reasons, while
improving time to market at the same
time. In order to achieve this, the
company has standardized the process
to consistently hand over products
from R&D to operations once feasibility


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As it can be seen from above
• Higher product success rate through incorporating consumer insight
Increase
• Increase sales through reducing Time to Market and Time to Scale
examples, depending on
profitable
• Create new sales by launching sustainable and green products.
sales
• …
the industry and company’s
Improve Product
Performance
• Reduce material cost by using substitute materials or material
business strategy, the focus
commonality
• Reduce development cost through concurrent NPD and Stage-Gate.
of PLM efforts are different
Decrease
Product
• Reduce R&D cost by using Open Innovation model.
• Reduce project costs through project portfolio management
and the benefits can be
related costs
or outsourcing.
realized in different areas
PI&PLM
• …
Benefits
of the supply chain.
• Ability to respond faster to customized orders through product
Improve
modularization
Supply Chain
In fact, the advantages of PLM go
• Reduce # of product returns by requirements management
Responsiveness • …
beyond the company’s product or R&D
Improve
organization and in many cases bring
Supply Chain
Performance
• Reduce inventory through product portfolio optimization or increase
benefits for the whole supply chain.
Reduce
product component commonality
Supply Chain
• Reduce transport cost through improved packaging design or weight
As an example, Design-to-Cost efforts
related Costs
• Reduce production cost through “Design-for-Manufacturability”
• …
and product complexity management
typically lead to lower amount of
inventory through the supply chain and
even bring down the cost of offering
services after sales dramatically.
Management of Product Compliance is
another example which results in a safer
production and transport activities and
improved image in marketing area.


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Efficient implementation of PLM depends on a number of
conditions: High-percentage of company failures during
the R&D overhaul and PLM initiatives highlights the
importance of relevant knowledge, skills and operating
models for product development.
Potential reasons preventing successful Product Innovation and PLM Initiatives
A recent Pan-European study conducted
by Accenture regarding product
Resources not skilled enough or do not have
34%
a “big picture mentality”
development has revealed that 1%
Insufficient involvement of relevant stakeholders,
of product development improvement
33%
departments, and partners
efforts fail and % end up with time/
Insufficient scope & release mgmt./implementation
budget overrun. Among top reasons
22%
effort too high
for these failures, we can refer to: Not
Endless decision cycles/insufficient project
19%
skilled enough Resources, lack of a “big
progress control
picture mentality” and not involving all
User acceptance
17%
relevant stakeholders.
Integration complexity underestimated
17%
Re-design of products & processes not part
15%
of the project
Poor system perfomance
14%
Vision and strategic direction unclear
14%
Source: Accenture internal analysis based on pan-European “Collaborative Product Development” Survey results
Critical Success Factors for successful PLM Initiatives
Therefore, special attention to Critical
Critical Success Factor
Description
Success Factors is of great importance
in any PLM implementation program.
Reliable values concerning benefits and costs in early stages of the project
Value Driven
to derive robust decision basis for future investments and roll-out sequences
We have found out that such success
Value
factors can typically be categorized
in 5 main areas.
Consequent product standardization and optimization of core processes,
Re-Design
Value
organizations and applications as an essential part of the project scope
Then, as a conclusion, we consider that
PLM should be driven as a strategic
Jump-Start capabilities. Professional project management, re-use
topic in CEO’s agenda, provided the
Project Speed
of proven approaches, pre-defined business processes, and pre-configured
Risk, Cost
systems. Utilization of Offshore Development strategies.
value that it can bring to a company
(sales increase, more profitable
Tight integration of downstream business processes and applications
products, reduction of supply chain
Integration
Value
cross sites and cross the extended company network
inefficiencies, better customer image,
etc), but also needs to be treated as
Achieve commitment and buy-in on the organizational and the individual
a program that requires using high
Value Driven
Risk
level through an integrated set of tailored Change Management actions
skilled resources combining strategic,
Source: Accenture internal analysis based on pan-European “Collaborative Product Development” Survey results
functional, technical and change
management abilities.
5

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Client Teams
Accenture Local Teams
Accenture PLM Center of Excellence
PLM Leading
Accenture
solution vendors
Delivery Centers
Within Accenture Product
In order to create differentiated
• A central hub for working in
Innovation&PLM Practice,
capabilities related to Product
conjunction with leading PLM
Innovation and PLM and deliver high
software vendors can help address
PLM CoE has performed a
performance to the clients, Accenture
our customer chal enges by providing
key role in delivering high
also established a Center of Excellence
an independent view on which PLM
performance to the clients.
(CoE) for PLM in EMEA in 00.
technology can provide better results
Motivations behind this effort were
in different situations.
clear:
Founded in 1989, Accenture Product
• Point of creating, gathering and
Innovation and PLM practice is one
• A place representing Accenture PLM
sharing PLM knowledge much
of the core groups within Accenture
capabilities to bring our clients and
more efficiently as some assets
Supply Chain Service Line. As the #1
help them to shape their scope and
and experience can be consolidated
revenue leader for independent (not
direction of PLM programs, work
and then maintained and improved
selling SW) PLM services and leveraging
on specific PLM issues, by putting
with higher visibility to the overall
the expertise of its more than 500
together the people with the skil s
company.
dedicated PLM professionals globally,
and experience in different processes,

the company has developed a range of
technologies and industries.
PLM offerings from product strategy
• Highly skil ed teams of PLM
to system implementation. As a result,
specialists complementing Accenture
Accenture has worked so far with more
competencies at local level providing
than 50 companies delivering high
trained and experienced people that
performance PLM capabilities.
can act as subject matter experts
Its strong strategic alliances and joint
and participate in the delivery of PLM
methodology with top 5 PLM SW
capabilities.
vendors; namely SAP, Siemens PLM, PTC,

Oracle, and Dassault has also enabled

the company to gain insights on the

implementation side and be able to

respond to different requirements
of the clients.


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Today, after 6 years of improvement and effort, our PLM Centre of
Excellence has largely contributed to increase Accenture’s success
and market share in PLM area. The center has helped in building a
large expertise-base which is key in ensuring project success and also
has created relevant assets which enable a high performance PLM
capability delivery to businesses all around the globe.


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About Accenture
Contacts:
Accenture is a global management
Jose Bleda
consulting, technology services and
Global Business Solution Lead
outsourcing company. Committed
+ 9  1000
Jose.bleda@accenture.com
to delivering innovation, Accenture
col aborates with its clients to help
Enrique Ramirez
them become high-performance
PLM CoE Lead
businesses and governments. With
+ 91 59 000
deep industry and business process
enrique.ramirez@accenture.com
expertise, broad global resources and
a proven track record, Accenture can
mobilize the right people, skil s and
technologies to help clients improve
their performance. With approximately
10,000 people in 9 countries, the
company generated net revenues of
US$19.0 bil ion for the fiscal year
ended Aug. 1, 00. Its home page
is www.accenture.com
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