PRODUCT LIFECYCLE MANAGEMENT
Brand-Oriented Value Chains Find
PLM Quite Relevant
PLM applications have grown up in engineering or technology-oriented value chains where
product and technological complexity required a much firmer grasp of specifications and proac-
tive lifecycle management, but a number of market trends suggest PLM applications might
offer important capabilities to process manufacturers.
—Simon Ellis, practice director, Supply Chain Strategies, IDC Manufacturing Insights
rand-oriented value chains (BOVC), typically
process manufacturing, are those companies
that deliver branded consumer products, and
where the essential cadence of the manufac- B
get to full production volume more quickly.
These challenges exist in the context of ever-increasing
rates of manufacturing outsourcing, in many cases to overseas suppliers, along with the inevitable globalization of
turing operation and supply chain is driven by highly vari- demand.
able demand across a large number of SKUs. The complexity
In many ways, PLM adoption is a journey. Companies start
of SKU management, innovation churn, demand uncertainty out by recognizing that they have a problem in a part of their
and low switching costs puts a premium on visibility and business, undertake a level of process redesign and implement
responsiveness.
In terms of the competitive environment, BOVC manufac-
a point tool to solve the problem.
More recently, BOVC companies have begun to realize that
turers face a number of growing challenges:
things like the innovation process are not a series of discon-
• Growing regulatory complexity, both in terms of govern- nected processes, that they are connected (crossing organiza-
mental legislation and consumer visibility, leading to greater tions, local and global sites, and partners) and must be
frequency of product recalls and negative brand image.
coordinated to manage and optimize the product pipeline and
• Proliferating retailer requirements, not just product attrib- product throughput—while also lowering costs, maintaining
utes/sizes, but also in delivery requirements and frequency, quality, compliance and traceability.
exacerbated by the “globalization of demand.”
• Accelerating pace of innovation, both in terms of SKU
The Outlook
churn and to fight off the growth of retailer-branded private We are forecasting that PLM application spending growth in
label.
process manufacturing companies over the next few years will
• Although not yet to the pace of high-tech, BOVC manu- outperform the remaining manufacturing segments by almost
facturers are seeing shorter product lifecycles, and the need to 2 percentage points.
