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)

PTC response

From a conversation with William Berutti, VP Business Development, in March 2002

PTC's focus is on manufacturing companies. For these companies, the products that they design and manufacture are the most important factors of success. It is well established that most of a product's cost and performance is settled during its design stage. More efficient production techniques and better management of inventory within the supply chain can only make minor improvements in cost and performance.

In the first stage of the product lifecycle, both the product and the resources that will be needed to create it are fluid. Gradually the product design iterates and evolves to a point where it's resources and costs become largely fixed. This transition from the design stage to the fulfilment stage often causes problems for manufacturing companies. PTC's aim is to provide solutions that create real value by easing the transition between the design phase and these later stages. Enabling Product Lifecycle Management (PLM) and Supply Chain Management (SCM) to work together is one key drive.

Designs evolve by iteration. As engineers collaborate, the product improves continuously. Outsourcing of all kinds is increasing. Sometimes these collaborating engineers are in different disciplines and/or different companies. Today, a lot of the focus in engineer-to-engineer discussions is about product and part function. Often there isn't enough time to also consider cost and delay issues. Engineers need to exchange concepts, requirements, test specifications and documentation, rather than just simple geometry. Data transfer is not their main issue.

The problem today is the need to extend control beyond simple geometry capture to all the product information in the supply chain. PTC's focus is to provide collaboration and control in the transition from design to the later stages, across sites and enterprises. This focus in PTC's solutions will permit engineers to concentrate on driving down costs, not simply exchanging geometry.

From an email exchange with Shaun Ennis, Manager of Analyst Relations, PTC in July 2002

In the short to medium term PLM will emerge as an enterprise applications category recognised by users, industry analysts and journalists.

What makes a category emerge
Categories emerge to be generally recognised when:
They are large enough and have distinct category vendors
Needs are generic enough to cut across industry sectors
The technology or implementation best practices are difficult
When these criteria are met the most experienced vendors increase their market advantages. They grow enough both organically and by acquisition to help shape the category.

ERP, CRM and PLM fit this bill
ERP because a common transaction environment within a company is difficult and valuable
CRM because unified sales, support and marketing best practices are difficult and valuable
PLM because unified rich product data (unlike the transactional data for ERP and CRM) is difficult and valuable
ERP will remain the biggest category because it was the first category and now has the largest enterprise and market footprint. CRM will remain a category because, like PLM, it is backed (i.e. proved) by many non-ERP vendors with proven histories and deep technology.

PLM will emerge as a category.
PLM will emerge as a category, because the PLM space already has critical mass independent of ERP. Agile, Autodesk, Dassault, EDS PLM, PTC and MatrixOne are all non-ERP vendors with a dedicated focus on the PLM space. i2, SAP and Oracle are entering the market realizing that PLM is going to be a big category.

Unlike SCM or CRM, there is no single vendor dominating the market. PTC, Dassault or EDS PLM each have a roughly equal share of the space.

According to AMR Research, the PLM market will grow from $2B in 2001 to $7.5B in 2006.

PLM is still growing
PLM ploughed ahead with 30%+ growth. This is because the product development software market is much more established (albeit as islands) than other enterprise applications were at this stage. Also, like CRM, PLM is increasingly critical to real competitive advantage.

The longer term
PTC agrees generally with Cambashi that there will be new synchronisation categories but think that transition is 10-15 years away. Those synchronisation pillars are higher-level business functions that need to be built on core systems such as ERP, PLM, CRM and SCM solving base level business functions.

Remember it took 10-15 years for ERP to emerge as a true category and even the most celebrated IT architecture of all time (the Internet) took 10 years to become the mainstream platform choice for corporate applications.


You can find out more about PTC on their website: www.ptc.com

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

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