The PLM Debate
As part of our ongoing research programme, Cambashi is running a debate on product lifecycle management (PLM) and how it interfaces with the supply chain. Various IT vendors were invited to respond to a discussion paper : "In 2004, will PLM and SCM still be recognisable TLAs?" (a version of which was first published in the FT)

IBM comments on PLM:
Is PLM an enterprise application suite like ERP, CRM, SCM or is it simply an umbrella concept?

Christine Lemyze, VP marketing and Steve Shoaf, Strategic Marketing Manager, IBM Product Lifecycle Management

This question can be answered by asking another: Can the lifecycle of a product be managed from concept through to its retirement using a single application suite? Most people would answer, "no." Clearly, applications such as ERP, CRM, and SCM play a major role during product development, but products do not get developed and managed in these environments.

PLM is not limited to applications traditionally associated with product development, such as CAD/CAM/CAE and PDM. While these applications play a major role, they are insufficient to support today's requirements for product lifecycle management. While product development in the past was centered within a single vertically integrated company, it is now distributed throughout a network of companies, all of which focus on adding value within a specific portion of the product development process. These "value chains", as they are often called, seek competitive advantages against other value chains that may be developing competitive products. They obtain a competitive advantage through greater efficiencies and greater abilities to innovate, thus enabling them to get the right product to market first with the best quality.

Value chains gain efficiency by lowering the overall costs of their product. Understanding costs early in the design cycle cannot be accomplished by CAD/CAM/CAE alone. Overall product cost is dependent upon availability of individual components, for example, which could exist in an inventory. Understanding whether a component is in inventory, and if not, when it might become available, requires integration to other enterprise applications, such as ERP and SCM. In this sense, ERP and SCM play a vital role in product development, and therefore fall within the PLM umbrella concept.

Similarly, ability to innovate helps value chains develop the products that customers really desire. Understanding customers' preferences and satisfaction levels with existing products is difficult without a link into CRM. Thus, while CRM stands alone as an application suite, it is vital to product development, and can be considered to fall within the concept of PLM. Why put cassette players in your car, if 99% of your customers want CD players?

So, yes, PLM is a concept that embraces ERP, SCM and CRM applications to the extent that they support the overall process of developing, building, and supporting products. However, this doesn't mean that the application suite which is contained within PLM includes these applications as well. And, PLM as an umbrella concept embraces much more than just other enterprise applications. It includes the process of managing product portfolios - i.e., helping upper management decide what products should be developed and at what price. It includes the middleware and infrastructure that enables multiple companies in a value chain to participate in a distributed product development process. It includes business consultation that helps determine how to realize product development best practices. Finally, it includes implementation services that turn an application into a vital business system.

In summary, the answer to whether PLM is an application suite like ERP, SCM, and CRM or simply an umbrella concept is not an "either-or" answer. PLM is both. As an umbrella, it covers the entire product development and management process. However, it also happens to contain a suite of applications focused on enabling increased efficiency and innovation within product development.

To find out more about IBM PLM, see their website at www-1.ibm.com/industries/plm/

If you have any feedback to add to this debate, please email plm@cambashi.com with the subject "PLM debate".