In today’s complex, fast-paced, and rapidly changing business environment, a tightly orchestrated process for managing a product’s life cycle can create a competitive advantage.
After all, product life cycles are getting shorter in many cases. Intense competition in global markets is raising expectations for more efficiency and speed to market, tighter control, and clearer visibility at every stage of the product life cycle. Especially when supported by high-quality software, crisp product life cycle management enables companies to make better-informed and timely decisions at every step of a product’s life.
If a product will be taken off the market altogether, its withdrawal must be managed. Care and consideration can help avoid reputational or legal fallout from retiring a product too quickly.
What Is Product Life Cycle Management (PLM)?
Product life cycle management (PLM) is the art and science of managing a product’s life span – and the information at each stage of the product’s life – from concept and inception, through design and manufacturing, up to and including sales and marketing, support, and, eventually, maturity and sunsetting, or retirement.
The 5 Stages of Product Life Cycle Management
Although different sources may offer slight variations in these stages and labels, experts generally agree on the following five main stages of PLM:
Product developers come up with an idea informed by research into customer needs, competitor analysis, and market gaps. The idea is then refined into product requirements, functionality, and aesthetics, while the technical requirements for manufacturing the product are determined. At this risky early stage, companies spend a lot of money with no guarantee of earning revenue. A business needs enough funds to take the product all the way to launch.
At this stage, a detailed design turns into a fully realized product by validating, analyzing, prototyping, and piloting it in the marketplace. This is typically an iterative process in product development, in which early user feedback is collected so that the product can be improved before it's officially launched. PLM software and processes help track design data and perform version control as the product advances through many cycles of development.
Once the final design of the product is complete, the method of manufacturing needs to be finalized, along with the necessary tools, processes, and facilities to make it. Production is simulated and checked against the original product specs. Sales and marketing development happen along with the engineering work, preparing the product for launch and distribution into the marketplace.
At this stage, sometimes referred to as 'growth,' the product has been successfully launched, consumers are buying in, and demand, revenue, and profits should be growing. There's ongoing work to support the product and service its customers. The business activities in this phase run the gamut from product maintenance and repair to recycling waste materials from manufacturing to improving operations. PLM software can help align the information flow among the people working on this stage. New product features, support services, and distribution channels might be added. Marketing at this phase moves from getting attention to building a brand presence to attract consumers to the product.
When sales level off or start to decline after a period of growth, this usually marks the start of the product’s maturity stage. This stage can eventually lead to its retirement.
To extend the product’s life, a product management team may try to revitalize its market presence. It could be worthwhile to reevaluate the product's pricing and marketing, potentially lowering the price or pursuing a new target audience. Perhaps it’s time to queue up a product extension or replacement product.
Some parent companies release a new product that makes the old one obsolete, similar to how streaming services hastened the decline of DVD rentals. If a product will be taken off the market altogether, its withdrawal must be managed. Care and consideration can help avoid reputational or legal fallout from retiring a product too quickly.
Critical factors to plan for before retirement:
- How to maintain customer loyalty
- Possible legal ramifications to stopping sales
- Timing of retirement
- How long to continue support and warrantee service
- How to redeploy internal teams that will be affected by the product’s retirement
Benefits of Product Life Cycle Management
Several benefits are likely for companies that take the time to invest in the PLM process of thinking, organization, continuous improvement, and data sharing.
Benefits can include:
Better Financial Oversight
The money required to develop, launch, and support a new product can sometimes add up to millions of dollars over several years. A poorly planned and executed product life cycle could result in hardship, job loss, or even bankruptcy for companies that are heavily dependent on a single product.
Keeping Up With the Market
The 'floor' is constantly rising for what it takes to compete in the global marketplace. PLM can help companies learn from their competitors and improve their products to meet or beat those rivals. PLM’s philosophy of continuous improvement ensures that products evolve to meet changing consumer needs.
Staying on Top of Shifting Technology Trends
Technological disruption, whether from artificial intelligence, blockchain, or other innovations, combined with customers’ increasing tech sophistication, are forcing businesses to review, redesign, and reinvent their products constantly to stay ahead.
Other noteworthy benefits of product life cycle management:
- Faster time to market
- Better product quality
- Improved product safety
- Increased sales
- Better supply chain collaboration
- Reduced errors and waste
The Bottom Line
The best companies usually have products at several stages in the product life cycle at any point in time. Product life cycle management requires an orderly process to see an idea through from concept to fruition to potential retirement. Continuously improving existing products through multiple iterations can mean the difference between market obsolescence and business success.
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