PLM in the ERI
Astaggering 85% of revenue for golf-club manufacturer PING comes from product introduced within the last two years. That makes the timely, efficient launch of new products mission-critical for the privately held Phoenix-based company.
With its implementation of Needham, Mass.-based PTC’s PDM link product lifecycle management solution, PING has increased its product launches from two to 15 per year—literally making the difference between languishing and thriving.
Developing and introducing new products is core to the consumer goods, apparel, food and beverage, and retail industries. But only recently have companies in these markets begun to set aside the IR spreadsheets and embrace product lifecycle management (PLM) tools, which have been more closely associated with engineering-driven verticals such as automotive, aerospace and electronics.
A precise definition for PLM, has not been coined, but most agree the term encompasses all processes associated with a product—from the initial concept through design, development, distribution and ultimately, end-use or disposition. Common elements of PLM suites include an enterprise product record, workflows, collaborative capabilities and compliance tools. Computer-aided design is also included by some, and the range of functionality continues to expand.
According to AMR Research’s “Product Lifecycle Management Applications Report, 2005 to 2010,” total revenue for the PLM market will grow from $11.3 billion this year to $16 billion by 2010. Members of the extended retail industry (ERI) currently represent a small portion of the current market, said Michael Burkett, VP at AMR. Apparel, for example, accounts for just 5% to 10% of sales, but is growing at about a 10% rate.
PLM in ERI: PLM couldn’t come at a better time for many players in the consumer goods to retail supply chain. It’s never been more critical to quickly and efficiently introduce products that people will actually buy. At the same time, production is becoming more global, upping the need to collaborate with suppliers on specifications and development.
“They’re dealing with very rapid product lifecycles. Further, customers keep changing their needs and purchasing habits, and manufacturers need better marketing segmentation for products,” said Joe Barkai, program director, product lifecycle strategies and PLM for IDC’s Manufacturing Insights.
In apparel specifically, “Product variability is up, the number of SKUs is increased, and while lifecycles have always been short, today they are more so,” said AMR’s Burkett. “They need to execute on cycle times faster.”
Boiled down, there are few differences in PLM challenges across industries, these analysts reported. Commonalities include complex workflows, large bills of material and the need to manage product “cookbooks” as well as a stable of suppliers.
But adopters tend to want solutions customized to suit the business processes, terminology and sensitivities of their own markets, and developers are rushing to fill the void with packages tailored to extended retail industry (ERI) members. “It’s more user-facing than fundamental transactions” that distinguish consumer packaged goods (CPG) or retail-oriented PLM suites, said IDC’s Barkai.
But the emphasis can differ. In retail, for example, “one of the most important benefits and opportunities with PLM is the ability to develop multiple parts of a product in parallel, he noted. When a product, its packaging and accessories are all developed simultaneously, time to market is shortened significantly, providing competitive advantage, he explained. That may be less important in, say, aerospace, where developing promotional packaging for a jet engine is not an issue.
The ability to manage the massive iterations of a garment is one apparel-specific PLM requirement. “Most other industries design around a machine rather than a person,” said Roger Mayerson, VP of product development and global sourcing for Casual Male XL, Canton, Mass., which uses New Generation Computing’s e-PLM SQL Series. “It’s like herding cats.”
Big and tall retailers such as Casual Male face even more unique sizing challenges. “The next big opportunity in this industry is to harness the creative process to move into the analytical part of the business” via apparel-oriented CAD-type tools, he predicted.
PLM Contacts| Agile Software 6373 San Ignacio Ave. San Jose, Calif. 95119-1200www.agile.com (408) 284-4000 Fax: (408) [email protected] AMR Research 125 Summer St. 4th Floor Boston, Mass. 02110-1616www.amrresearch.com Phone: (617) 542-6600 Fax: (617) [email protected] Casual Male XL 555 Turnpike St. Canton, Mass. 02021www.casualmale.com (800) [email protected] H.J. Heinz Co. 600 Grant St. Pittsburgh, Pa. 15219www.heinz.com Phone: (412) 456-5700 Fax: (412) 456-6128 IBM New Orchard Rd. Armonk, N.Y. 10504www.ibm.com Phone: (914) 499-1900 Fax: (914) 765-7382 Toll Free: (800) 426-4968 | IDC 5Speen St. Framingham, Mass. 01701www.idc.com Phone: (508) [email protected] Jones Apparel Group Corporate Offices 250 Rittenhouse Circle Bristol, Pa. 19007www.jny.com Phone: (215) 785-4000 PING P.O. Box 82000 Phoenix, Ariz. 85071-2000www.ping.com Phone: (800) 4-PING-FIT Procter & Gamble 1Procter & Gamble Plaza Cincinnati, Ohio 45202www.pg.com Phone: (513) 983-1100 Fax: (513) 983-9369 PTC 140 Kendrick St. Needham, Mass. 02494www.ptc.com Phone: (781) 370-5000 Fax: (781) 370-6000 UGS 5800 Granite Parkway, Suite 600 Plano, Texas 75024www.ugs.com Phone: (972) 987-3000 |
Other PLM selection criteria for Casual Male included roots in the apparel business, ease of use (an essential ingredient when working with non-English-speaking overseas suppliers), as well as low technical overhead and image capabilities.
“It’s critical that it be a very visual system,” Mayerson added. “Others were very verbiage-oriented.”
Cross-industry innovation: While they enhance their offerings for CPG and retail, PLM application developers continue to push out new functionality. One major focus is the convergence of design and engineering functions with the supply chain and customer ends of th