Product Lifecycle Management

What is Product Lifecycle Management (PLM)?

Product lifecycle management (PLM) is a comprehensive approach to handling a product as it moves through the five stages of the product life cycle: development, introduction, growth, maturity, and decline. It begins with initial conception, and covers everything from design and development to its ultimate disposal.

PLM integrates people, processes, business systems, and information to create a cohesive data model for a product. Its holistic management process ensures that all stages of a product’s lifecycle are coordinated and optimized to improve product quality, reduce time to market, minimize costs, and maximize profitability.

Synonyms

• PLM
• Product development lifecycle
• Product management lifecycle

Fundamental Concepts in PLM

At each stage in the product lifecycle, different marketing, sales, and growth tactics are required to maximize the product’s potential.

In earlier stages where there is less competition and more opportunity for growth, businesses can focus on building awareness and generating demand. In later stages when they’ve achieved product-market fit, they can focus on expanding, optimizing internally, and using marketing to differentiate their products rather than introduce new ones.

That’s the core objective of PLM: optimizing the product journey to maximize its potential and profitability.

Key concepts of PLM include:

1. Centralized data management

PLM provides a central repository for all product-related data. This ensures that all stakeholders have access to the most current and accurate information, which is essential for effective decision-making and reducing errors throughout the entire product lifecycle​​.

2. Cross-functional collaboration

PLM fosters improved collaboration across various departments, including:

• Design
• Engineering
• Manufacturing
• Supply chain management
• Marketing
• Customer support

By providing real-time access to production data and other crucial information, PLM ensures all teams work in harmony towards common goals, reducing miscommunication and errors.

3. Digital thread

The digital thread is a continuous flow of data that connects all phases of the product lifecycle. It integrates real-time data from technologies like IoT, AI, and machine learning, providing a comprehensive view of the product from conception to end-of-life. This enables faster product innovation, better decision-making, and improved overall quality​.

4. Digital twin

A digital twin is a virtual model of a physical product. It uses data to simulate the real-world behavior of a product, allowing for virtual testing and optimization. This concept helps in predicting performance issues and making data-driven improvements without the need for physical prototypes.

5. Change management

PLM systems facilitate efficient tracking and management of product changes. This ensures that every modification, whether minor or major, is documented and communicated to all relevant parties, minimizing the risk of errors and enabling smooth transitions between different product versions​.

6. Regulatory compliance

PLM helps organizations ensure that their products comply with industry standards and regulations. The system can track regulatory requirements and flag potential compliance issues, making it easier to adhere to necessary guidelines throughout the product lifecycle​.

7. Lifecycle data management

Through integrated software, PLM ensures the integrity and accessibility of product data throughout its lifecycle. This includes planning, programming, and budgeting for product data management and maintenance, and establishing methods for its access and reuse by relevant organizations and stakeholders​​.

8. Cost and resource optimization

By providing a comprehensive view of the product lifecycle and facilitating data-driven decision-making, PLM helps businesses optimize resource allocation, reduce waste, and ultimately increase profitability. It allows for strategic planning and efficient management of development processes, leading to cost savings and enhanced product quality.

9. Strategic benefits to the organization

Overall, PLM offers significant strategic advantages, including reduced time to market, improved product quality, enhanced collaboration, and data-driven decision-making. These all contribute to a more efficient and successful product lifecycle management process​.

Product Lifecycle Management Stages

The product lifecycle management system follows the five stages of a product’s lifecycle:

• Development
• Introduction
• Growth
• Maturity
• Decline

The real product lifecycle, however, starts with ideation.

0. Ideation

The ideation stage is the preliminary phase in product lifecycle management where product team members generate, refine, and evaluate new product ideas. It lays the foundation for all subsequent stages in the product’s lifecycle.

Idea generation starts with brainstorming sessions, where product teams generate a wide range of ideas. They’ll consider user feedback (from potential and/or current users) through interviews, focus groups, and surveys, to understand needs, preferences, and pain points. They’ll also study competitors’ products to identify market gaps and opportunities.

From there, they create early prototypes or mockups of selected ideas to explore their feasibility and gather initial feedback. This involves iterative testing and refinement based on user feedback and technical assessments.

To get a better idea of how the product will actually perform in the market, companies normally conduct market research and create a minimum viable product (MVP). They’ll create a series of “how might we…” statements, reframing problems into opportunities for creative solutions, encouraging a broad range of innovative ideas.

Before moving on to full-fledged development, they’ll assess the technical, financial, and operational feasibility of the concepts. And, using methods like voting boards, SCAMPER (Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, Reverse), and mind mapping, they can prioritize ideas based on their potential impact and alignment with business goals.

1. Development

After presenting the product ideas to a target audience to gather feedback and refine the concepts further, the product team is ready to begin the development phase. This involves transforming the selected product concept from the ideation stage into a tangible product.

The development stage includes:

• Creating detailed engineering drawings and specifications for the product (e.g., wireframes, CAD models, blueprints, and other technical documents)
• Choosing appropriate materials and components that meet the product’s design and performance requirements
• Building physical or digital prototypes to test the product design (low-fidelity prototypes for early testing and high-fidelity ones to closely resemble the final product)
• Conducting functionality tests, durability tests, and user experience evaluations on prototypes to identify design flaws and areas for improvement
• Creating detailed documentation for the product, including user manuals, maintenance guides, and technical specifications
• Running small-scale production runs to test production and delivery processes before full-scale launch

For SaaS products, the product development process includes coding, integration, and testing of software components. For hardware products, it involves developing and assembling electronic components, mechanical parts, and other hardware elements. For physical goods, it involves sourcing raw materials, manufacturing, and packaging.

The development team works closely with other departments (e.g., marketing and sales) to align the product design with customer needs. During product planning, they also collaborate with suppliers to ensure timely delivery of components and materials.

2. Introduction

The introduction stage marks the product’s launch to the market. It’s the first opportunity for customers to purchase and use the product.

The goals of this stage include:

• Generating buzz and excitement around the product launch
• Building brand awareness and recognition through marketing, advertising, and PR efforts
• Setting up distribution channels to make the product available to customers
• A combination of soft launches, beta releases, or full market releases depending on the go-to-market (GTM) strategy
• Addressing any initial issues or concerns with the product performance or functionality

Successful product launches require a comprehensive plan that includes timelines, goals, and key performance indicators (KPIs). The plan should detail the steps needed to introduce the product to the market successfully.

Businesses also need to invest in tools that can help them streamline their sales and marketing processes. For sellers, that’s CPQ (configure, price, quote) software, sales scripts, and detailed product information. For marketers, it’s marketing automation tools.

3. Growth

The growth stage of the product lifecycle is characterized by increasing market acceptance, rising sales, and better profit margins. During this phase, the focus shifts from establishing the product in the market to scaling operations, enhancing features, and gaining market share.

Growth-stage businesses are primarily concerned with:

• Increasing the availability of the product through additional distribution channels, both online and offline
• Strengthening the brand identity and reputation to foster customer loyalty and differentiate the product from competitors
• Engaging with customers through social media, community building, and loyalty programs to build a strong customer base
• Increasing the size and reach of the sales force to capture more market opportunities, while launching incentive programs to boost performance
• Refining the product to improve quality, performance, and reliability, addressing any issues identified during the introduction stage

At this point, businesses also have to scale production capacity to meet growing demand while maintaining quality standards. This means optimizing the supply chain (or, in the case of SaaS products, the software development process) to ensure efficient production and distribution, reducing costs, and improving delivery times.

Continuously monitoring sales performance and customer feedback to identify trends, opportunities, and potential issues is critical in the growth stage.

4. Maturity

The maturity stage of the product lifecycle is defined by a peak in sales growth, market saturation, and intensified competition. While growth-stage companies see periods of rapid (almost exponential) growth, mature companies see it start to plateau. These businesses have established systems, so they can shift their focus to optimizing operations and maximizing their profit margins.

Once a product reaches maturity, companies typically focus on:

• Employing strategies like competitive pricing, promotions, and loyalty programs to retain existing customers and attract new ones
• Diversifying the product line with new variations, upgrades, bundles, and/or complementary products to appeal to different customer segments
• Differentiating from competitors through marketing, branding, and product positioning
• Reducing costs through production efficiency, economies of scale, and supply chain optimization
• Allocating resources effectively to support high-margin products and profitable market segments

As the market becomes saturated, finding new customers becomes increasingly difficult, and sales growth slows down. Competitors may aggressively target the same market, leading to price wars and reduced profit margins.

Since there’s constant pressure to innovate and improve the product to stay relevant, preventing churn and acting on customer feedback is crucial. Otherwise, customers will start looking for alternatives​.

5. Decline

The decline stage is marked by market saturation, technological advancements, and changing consumer preferences that render the product less competitive. Managing this final stage effectively involves strategic decisions to maximize remaining value, minimize costs, and plan for product discontinuation.

There are a few activities businesses carry out at this stage:

• Competitor, market, and customer behavior analyses to confirm the product is, in fact, losing relevance
• Scaling back sales and marketing expenses to align with lower sales volumes
• Evaluating the entire product line to identify which products should be continued, modified, or discontinued (product rationalization)
• Planning the orderly discontinuation of the product, including managing remaining inventory and phasing out production gradually
• Transparently communicating with customers about the product’s discontinuation plans

In an effort to retain customers, the important thing here is to offer a solution that can fulfill their unmet needs. This might include discounts to try your new product or service and continued support and service for a specified period.

Product Lifecycle Management Best Practices

To successfully implement PLM, businesses need to create a cross-functional team involving key stakeholders from different departments.

Marketing and sales teams should collaborate with product development teams from the beginning to ensure that everyone has a good understanding of the product, its features, and its target market.

Other teams, like finance and supply chain management, should come on board at various points to assess the feasibility of the product and support its development.

Once you have your team assembled, follow these best practices to make sure your product development and management journey is successful:

• Implement a centralized product lifecycle management software.
• Use your PLM system to share information across all departments.
• Define clear objectives and KPIs to measure the success of your product launch, growth initiatives, and overall performance.
• Continuously monitor customer feedback and market trends to identify opportunities for improvement and innovation.
• Manage change orders and revisions effectively to avoid delays, cost overruns, and quality issues.

For change management, it helps to create a Change Control Board consisting of representatives from different departments (e.g., engineering, quality assurance, manufacturing) to evaluate and approve or reject change requests​.

Future of PLM Technology 

Modern PLM relies heavily on digital tools and technologies to manage and integrate information across different stages of the product lifecycle.

Besides the centralized platform, product lifecycle management tools include:

• CAD (computer-aided design)
• PDM (product data management)
• ERP (enterprise resource planning)
• Supply chain management
• CRM
• IoT devices and data analytics platforms
• Real-time pricing

Advances in PLM software enable real-time data sharing, 3D modeling, and digital twin technologies, enhancing the ability to simulate, test, and optimize products before they reach the market.

Digital twins — virtual replicas of physical products that allow for detailed simulations and real-time monitoring — have a particularly profound impact on physical product development. They enable companies to test and optimize products before they are physically built, reducing development costs and time.

There is also a growing focus on sustainability and the circular economy, driven by regulatory requirements and consumer demand for environmentally responsible products. PLM systems help design products that can be recycled, repaired, and repurposed. Digital product passports, which provide detailed information about a product’s lifecycle impact, exemplify this trend.

FAQs

Andrew Parker

Andrew is a professional copywriter with expertise in creating content focused on business-to-business (B2B) software. He conducts research and produces articles that provide valuable insights and information to his readers.