SAP Democratizes PLM

By Sam Sliman
President, Optimal Solutions Integration

In August of this year, SAP unveiled its roadmap for the company’s product lifecycle management (PLM) application. According to SAP, enhancements made to SAP PLM over the next 3 years will further help its manufacturing customers “accelerate and simplify the business of products.”

According to AMR Research, the PLM market continues to grow at a healthy 9.7 percent as companies look to streamline new product development and launch processes. A more optimistic report issued in April by consulting firm CIMdata Inc. claims that the worldwide PLM market experienced a "stronger than expected" year in 2006, growing 10.4% to $20.1 billion. CIMdata estimates the PLM market to hit $30 billion by 2011.

Among the biggest drivers for PLM growth is the uptake in offshoring, outsourcing and contract manufacturing, as well as shorter product lifecycles, increasingly dynamic and complex regulatory and compliance landscapes, and the constant pressure to reduce costs and gain a competitive edge through process innovation.

So how will SAP’s PLM enhancements help manufacturers improve on all of these fronts? Primarily, by breaking through the traditional engineering-only PLM barrier via fast-and-easy integration capability with other core enterprise systems, including all applications of the SAP Business Suite, SAP ERP, SAP Customer Relationship Management, SAP Supplier Relationship Management and SAP Supply Chain Management.

"There's an opportunity for manufacturers to use PLM tools more effectively to make better, faster decisions that the global economy demands," according to Joe Barkai, practice director for the Product Lifecycle Strategies practice at Manufacturing Insights, an IDC company. “PLM is as much about effective product lifecycle decision-making as it is about product engineering. PLM tools must be used not only to support engineering tasks, but, more importantly, to create and manage a comprehensive product management strategy, culture and processes."

According to Hans Thalbauer, SAP's head of Solution Management PLM,"PLM, supply chain management, enterprise resource planning, and customer-relationship management all need to work together as one solution focused on the business process instead of supporting a single department. This deep integration we see as a key differentiator. [SAP’s PLM offering] isn't a silo approach; it's an end-to-end business approach."

New releases of SAP PLM will leverage enterprise service-oriented architecture (SOA) and will be delivered by way of quickly deployable composite applications. The first SAP PLM enhancement, slated for release by the end of this year, is a set of new processes for portfolio planning that will speed up time to market for new products. In 2008, SAP will release a new interface for PLM that will require less training and will be easier to use for non-techies. 2009's PLM enhancements will improve integration of product development processes and feature new product information management capabilities. In 2010, SAP plans to focus on "the assimilation of real-world information," including integration with digital manufacturing tools and improved RFID and barcode functionality.

Building on the inherent integration capability of SAP PLM, a common element to all of these enhancements is the incorporation of multiple enterprise systems and the participation of a broader array of a company’s employees, suppliers, business partners and customers.

Added Thalbauer, "PLM is no longer just software that manages your drawings or bills of materials. PLM has become a key backbone for a company, and a way to collect ideas from around the world; to be able to start to bundle services around a product and bring this new kind of product to market, and follow up when the product is on the market to serve customer needs."

This democratization of PLM enables enterprise-wide visibility and collaboration and arms manufacturers with an arsenal of new weapons to tackle profit-sapping inventory and production challenges. The competitive advantage of being faster, smarter and more nimble on the product launch front will entice buy-in and win votes of approval across departments and business units.