For our purposes, a definition of PLM is “A blend of business and information technology strategies and tools that allow a company to create and manage all product–related information and processes throughout the lifecycle of the product and the extended enterprise that creates and uses the information.”
Several industry-consulting firms have expanded the definition. For instance, AMR Research identifies the phases of the product lifecycle as define, design, promote, supply and support. In addition, AMR classifies the components as:
- Product Data Management (PDM)
- Collaborative Product Design
- Product Portfolio Management
- Direct Material Sourcing
- Customer Needs Management
PLM evolved from the earlier term Product Data Management (PDM) – managing all product related information, including textual data and digital files, such as CAD models over the product life cycle. The scope of PDM included product structuring (BOM), configuration management and elements of Collaborative Product Design.
A key perspective is that a PLM system serves a distinctly different purpose than an enterprise resource planning (ERP) system. PLM is for an innovative environment; in contrast, ERP systems are highly transaction oriented with a different architecture.
To gain the maximum benefits of PLM requires tight integration with ERP. A key strategic benefit is reducing time-to-market (and volume and profitability). In addition, numerous operational benefits are achievable, for instance, reducing the cost of engineering changes.
As the PLM industry matures, we can expect variations and expansion of the above definitions. In the current marketplace, unfortunately, there is no commonly accepted definition. Therefore, if evaluation of PLM software is a consideration, it is important for the selection team to agree on a frame of reference for consistent evaluation of PLM vendor offerings. When embarking on the PLM journey, each individual company should first forge its specific definition to frame its vision and to identify the expected benefits of a well-implemented PLM system.
