Retailers have becoming increasingly interested in Product Lifecycle Management (PLM) solutions – and for good reason. Those retailers exploring and implementing PLM are doing so with the ultimate goal of improving the speed and efficiency of their Product Development and Sourcing processes as well as to provide internal and external stakeholders with accurate and timely information to drive decision-making. There are a number of software vendors making significant investments in enhancing their solutions to address this interest.
Traditionally, business processes that PLM solutions support were highly manual and heavily reliant on spreadsheets. Further, as brands are introduced and/or consolidated under one roof, varying processes need to be managed. Most companies know that not only are these methods time-consuming and error-prone, but they also do not enable the critical capabilities to react quickly enough to today’s fast-paced retail environment; plus, reporting is challenging due to the need to assemble information from multiple, often disparate sources.
Many retailers are hoping to achieve a competitive advantage by transforming their businesses through implementing PLM systems. The top five benefits retailers aim to achieve with PLM are:
• Reduce product development cycle time
• Standardize processes
• Lower product costs
• Improve product quality/reduce defects
• Improve communication and collaboration with trading partners
As with any major system implementation, sufficient time and resources must be focused on the upfront planning, evaluation and selection of the system best suited for the retailer’s requirements and environment. Additionally, the implementation must be carefully planned, including the identification of appropriate workstreams and implementation partners. This includes not only the solution vendor, but also resources devoted to project management, training, change management, and post-implementation end-user support.
When these factors are carefully considered and included as part of a PLM initiative, a number of other capabilities and benefits can be realized:
• Faster time-to-market
• Decreased cost of new product introduction
• Product reuse
• Greater design efficiency & Portfolio Management
• Improved design review and approval processes
• BOM Management
• Reduced prototyping costs
• Standardization of information
• Integration of graphics, materials, color and sketch libraries
• Enhanced brand equity
• More accurate and timely request for quote
• Improved margins based on raw material consolidation and reduced expediting
• Vendor collaboration with real time access to updated information
• Increased visibility into submit approvals and sign-offs
• Standards and regulatory compliance
Data, People & Processes
• Single version of the truth via a common repository
• Insight into critical processes, repeatability of processes
• Reporting and analytics against KPI’s
• Improved communication and collaboration
• Enhanced productivity
• Better resource utilization
• Better calendar adherence
The Parker Avery Group has outlined several use cases, based on real world examples, that outline situations of “before vs. after” PLM implementation.
Further attention to the benefits of PLM solutions have resulted in several studies that provide more quantifiable figures:
• 10% – 20% reduction in costs for packaging
• 5% – 10% reduction in direct materials spend
• 2% – 5% reduction in product costs
Speed to Market:
• 5x – 7x higher inventory turnover
• 15% – 20% net-margin improvement
• > 80% of product selling-through at full-price
• 10% – 12% comparable store sales increase
• 12x – 17x increase in annual shopper frequency
• 5% – 25% margin increase
• 20% – 40% improvement in product quality
• 10% – 80% reduction in cycle time
All of this underpins the increasing adoption of PLM solutions, and represents a pretty strong reason to at least begin the discussion – especially if your company is represented in any of the above “Before PLM” scenarios.
Furthermore, PLM solution vendors are addressing the unique needs of different retail segments, expanding from apparel and footwear into the home goods space and others. The benefits are real – albeit not without careful and holistic planning, execution and the right implementation team.
• By aligning business teams across products and brands, leverage over product development and sourcing is made possible, contributing valuable time savings that impact profitability.
• By enabling collaboration among internal and external teams, efficiencies are made possible, speed to market is enabled and costs are reduced.
• With access to information, visibility and control over the day to day activities that drive brand equity can now be managed effectively and measured.
• Providing the opportunity to define and design processes that are repeatable and supported by technology allows retailers to meet their most pressing business goals.