Your Guide to Software Selection

PLM Systems: The Ins and Outs

Product lifecycle management systems (PLM systems) are powerful enterprise-wide software solutions that manage every aspect of a product’s digital life. These sophisticated systems serve to integrate data, processes, business systems and people in an extended enterprise, facilitating the internal and external collaboration that is demanded by a new manufacturing environment.

The great promise of the global marketplace — new labor pools, new and expanded sources of raw materials, capital reservoirs and the potential for emerging markets of previously unimaginable scale — have, in fact, rewarded companies with many tangible benefits. But they’ve also introduced far more complexity and risk into the equation.

PLM systems have provided manufacturing companies with the much-needed tools to manage the complexity and opportunity of the extended supply and distribution chains of the global marketplace.

Probably the biggest challenge to all manufacturing businesses, large and small, is cost control. Research confirms that cost is influenced more in the design phase than in any other point in a product’s lifecycle. Proper management of a product’s cost in the design and sourcing stage can greatly impact a product’s final competitive advantage in the marketplace.

It makes sense, then, that technology should provide the most logical and efficient tool to meet this important challenge. In the 1990s, many manufacturing companies turned to software systems like Enterprise Resource Planning (ERP) to take on this challenge. This wasn’t a surprising outcome as both systems share some very fundamental properties.

Both systems keep track of data and property, and both systems have proven essential factors for developing successful strategies in this highly competitive environment. But there are also valid differences that point to the necessity for both systems working interdependently towards a unified goal.

Simply stated, PLM and ERP work on two highly separate but interdependent aspects of a singular product. PLM systems manage and control every aspect of design and development information of a digital product. ERP, meanwhile, focuses on the manufacturing, inventory and service of the physical product. It’s worth stressing, however, the importance of gaining cost control during the digital stage of the product in order to influence its final profit margin.

However, there’s been lag time between the adoption of ERP versus PLM software within all facets of the manufacturing industry.

There are undoubtedly many possible explanations for this. Perhaps the simplest one has to do with ERP’s initial strategic positioning in the manufacturing environment. The software’s ability to deliver tangible results and the unwavering belief in the value of a single enterprise-wide planning system that integrated manufacturing, logistics, distribution, inventory, shipping and accounting was pivotal to its success.

ERP presented a solution to coordinating and calibrating the many disparate business functions that went into the successful delivery of a product to market. Its promise (and delivery) of improved efficiencies and increased overall profits helped propel it to financial success in its early period of development.

Needless to say, many manufacturers that adopted ERP in this early phase were significantly impressed with the accrued benefits delivered by these powerful systems. Reducing inefficiencies, standardizing processes, simplifying the identification and adoption of best practices all contributed to a superior work experience and increased profitability for manufacturing.

It was quite clear that ERP provided the ideal set of processes for dealing with the ongoing physical manufacturing of a product. But on an ongoing basis, it became increasingly obvious that there were considerable shortcomings when it came to the handling of the product in its digital stage.

The formalization of the process that takes an idea from conception to realization requires specialized features — such as ideation and collaboration — that are incorporated into PLM systems. These systems provide a structured environment for capturing and managing ideas related to project development from all areas within and outside the organization.

The Promise of a PLM System

The management vacuum that existed in the digital stage of the manufacturing process was filled by PLM systems. They addressed the real and growing needs of the increasingly complex environment of product design organizations. The goal of efficiently managing, synchronizing and sharing complex, interdependent computer-aided design files among global teams and supply chains made PLM tools indispensable. This became the gold standard for managing all of the intellectual property that goes into defining a product.

All the early stages that define a product’s lifecycle — such as the engineering and design processes — are addressed and managed by PLM systems. If we consider the number and complexity of processes that are involved in the early digital life stages, a PLM system that is flexible and dynamic enough to manage product knowledge and data from a wide variety of sources is an essential adjunct that supports the best decisions possible for this stage of product development.

Compare Top PLM Software Leaders

Technology has directly impacted the level of sophistication of product design data, such as computer-aided design (CAD) models and specification documents. The managing and automating of governance and creation processes, which include portfolio management, release and change management, have also been impacted.

The Ideation and Collaboration Cycles

The collaborative aspect of the process is manifested by the software’s ability to permit the open viewing, amending and refining of all submissions. The addition of a tool to rate and rank ideas has further contributed to the inclusiveness and collaborative nature of the practice of formalizing the gathering and processing of ideas. Overall, companies that engage in a more deliberate process of ideation appear to benefit, as compared to companies that do not.


The primary function of product simulations and testing is to assess whether the product functions as it was intended to do. In other words, it ensures that the product meets the standards as set by the client or by a regulatory body. The greater the authenticity replicated by the test environment, the more reliable and valuable the test data will be. Three important considerations that should be addressed by a product simulation are:

  • What is the function that the product is intended to fulfill?
  • Will the product fulfill its function? Does the product perform as intended?
  • What is the feasibility of the manufacturing of this product? Quantity, quality, and price?

It’s relevant to note that the adoption of PLM software by organizations has expanded beyond large-scale manufacturing companies to incorporate the concept of “project” lifecycle management. Consequently, within this concept, the “project” simulation process also examines feasibility studies that can incorporate “as if” scenarios that include compliance requirements, supply chain management, visitor traffic, etc.

Engineering Change Management

The design and manufacture of products over the past few decades have witnessed a dramatic change in their operating environment. As discussed above, issues such as global competition, advances in technology and pockets of sophisticated consumers have exponentially shortened product lifecycles and increased the demand for more customized offerings. These new market realities have motivated companies to continually improve the efficiency of the product design process.

Perhaps one of the most significant components of the product design and development process is managing the engineering change process. While the very process of making alterations to parts, software, etc. can be regarded as tedious, there’s growing evidence that a well-managed and effective engineering change process is essential to a company’s ability to compete and succeed in the global marketplace.

The most critical phase of the engineering change process is the evaluation of the proposed change and the possible impacts of it. The two aspects that stand out in this phase are the impact of the change upon the product itself and the impact on the product’s lifecycle development process (e.g. budgetary and scheduling considerations). The ramifications of change on a project can be complex, requiring scrupulous management.


The complexity and scope of PLM systems are such that, in the past, they were predominantly used by large-scale manufacturing and engineering enterprises. Today, new challenges in the marketplace and global competition have triggered a wider interest in them.

Small and medium-sized companies, whether in manufacturing or even areas such as marketing, finance, and after-sale services have adopted PLM due to the capacity to streamline development and maximize the value of the project in question. As a strategic business approach, PLM systems are gaining wider acceptance for the effective management and use of corporate intellectual capital in all areas of the marketplace.

The concept of PLM has undergone a market-inspired evolution that’s attempted to move beyond the strict engineering aspects of a product to providing a larger shared platform for information management. This platform seeks to reach across the extended organization into all areas of project management (like marketing, sales, after sales) from beginning to end.

Concurrent with this evolution has been PLM’s adoption by smaller and more diversified areas of business, not just large-scale manufacturing. Today’s global marketplace requires the proper utilization of a company’s intellectual assets for a successful outcome.

PLM is an important business solution for bringing together people, information, and business processes across an organization. The dynamic cycle of creation, expansion, renewal and exchange of knowledge are the keys to a healthy and prosperous enterprise. PLM systems are the structures that support and manage this cycle.

Compare Top PLM Software Leaders

Gabriel GheorghiuPLM Systems: The Ins and Outs

Leave a Reply

Your email address will not be published. Required fields are marked *