The advantages of a PLM system beyond product development
The transformation pressure on manufacturing companies is increasing. They need to optimize their core business while simultaneously driving their digital transformation, enabling them to quickly react to changing market conditions and new customer requirements. Particularly for companies with complex product portfolios, it is essential to accurately calculate costs from the initial customer inquiry to order completion, coordinate manufacturing and development across locations, and involve numerous suppliers while always keeping an eye on target achievement.
An integrated PLM system helps companies master these challenges and set the course for long-term competitive success. With suitable function modules and interfaces, it supports them to align processes across departments for maximum efficiency, grasp complex interdependencies faster, and significantly reduce the time to market of their products.
Discover the specific added value that a PLM system provides to your company beyond the development department:
Product cost management
With integrated product cost management, product costs are calculated quickly and reliably during development. Pricing is optimized while costs are kept within budget.
Reliable sales planning is crucial for product development. In order to offer competitive products, companies need to know as early as possible what these will cost and are allowed to cost. If prices exceed the market average, they must offer convincing arguments to potential customers as to why. To achieve decent contribution margins, however, prices cannot be too low either. When conditions change – for example, due to fluctuating material costs or altered manufacturing processes resulting from new customer demands – this often leads to problems. This is because key metrics are usually calculated in separate IT systems in the controlling or accounting departments – outside product development, where 80% of the product costs are determined. Information synchronization and exchange are not digitally harmonized, making them time-consuming and error-prone. Under these conditions, meeting project budgets can be compared to navigating by sight in thick fog.
With the help of integrated product cost management, companies can accurately calculate product development costs in early development stages. When selecting a PLM system, a product costing module with easily adaptable calculation schemes should therefore be a factor to consider. This allows you to calculate various product lines at the same time and adhere to project budgets by capturing costs during development.
To enable the costing of product variants, colleagues outside product development should have direct access to the engineering bill of materials as well. A PLM system with its role-based access management concept allows just that. With this approach, companies set the course early on to achieve the desired profit margin. By analyzing different sales volumes, they determine the optimal price and increase product profitability.
The following areas in the company benefit from integrated cost management:
Controlling: A product costing module integrated into the PLM system allows the controlling department to directly access calculation schemes as well as product cost calculations from development and set relevant directives. This helps you ensure product profitability and contribution margins, increase cost-effectiveness, and steer your company with precision.
Sales: The quick and reliable calculation of variants, for example, for requested material alternatives, accelerates the quotation phase. Your sales team can provide quotes on short notice – and thus quickly increase revenue.
Procurement, materials management, and logistics: Keep larger quantities of frequently requested and used parts in stock to reduce procurement costs. Additionally, materials management can proactively stock alternative materials in appropriate quantities with regard to increasing sustainability aspects.
Product development: Control and break down costs to determine project profitability based on actual needs rather than fictitious specifications from the ERP system. This allows you to plan project costs realistically and adhere to budgets. Simultaneous cost tracking within the project enables you to document expected work efforts directly in the work breakdown structure and compare them with the cost breakdown. By utilizing project cost reports, your team always stays on top of things.
Requirements and variant management
Effective requirements and variant management sets the foundation to implement customer requirements faster, configure variants in no time, and bring innovations to market sooner.
Customer requirements are constantly increasing in both their quantity and the level of detail of their specifications. As the number of product variants grows, so does product complexity. Without requirements management along the entire product lifecycle, rapid and efficient development is hardly possible – let alone the use of suitable methods to support interdisciplinary collaboration, such as MBSE.
The increasing variant diversity also raises the risk of compromising the cost-effectiveness of procurement, manufacturing, and quality assurance. This is because, in conventional approaches, small batch sizes do not allow for economies of scale and the corresponding cost reductions.
PLM Software with integrated requirements management enables faster and more accurate product development in accordance with customer requirements. Requirements can be documented throughout the entire lifecycle and captured and edited more easily. The relationships between requirements are visualized in the digital product model and the degree of fulfillment can be permanently tracked. Additionally, PLM-supported requirements management provides the foundation for Model-based Systems Engineering (MBSE) for interdisciplinary teamwork.
Integrated variant management enables companies to strategically align their product portfolios and minimize the effort for variant configuration. With feature- and rule-based variability models, they can build platforms and product systems, limit variant diversity, reduce proliferation, and manage their portfolio in an efficient and cost-effective way. Additionally, the digital data and process organization of the PLM system facilitates largely automatic documentation, which significantly simplifies the fulfillment of compliance requirements.
Departments beyond development that benefit from PLM with integrated requirements and variant management:
Sales, product management, and product development: Sales can respond more quickly to customer inquiries and capture new or modified requirements directly in the PLM system. Product management and product development can easily process these requirements and simultaneously track their implementation, reducing lead times and increasing innovation productivity.
Variant management enables the targeted development of product portfolios tailored to market demand. Across departments, the company thus combines customer orientation with efficient value creation – for example, by leveraging intelligent process patterns and delivery strategies like CTO+ (Configure-to-Order in conjunction with Engineer-to-Order).
The platform approach and product systems set the foundation for a cost-effective and efficient portfolio. Furthermore, a PLM system ensures alignment with the company’s strategy and compliance with sustainability goals. It enables them to develop their products with cost-effectiveness in mind – even from batch size 1 – and implement innovations for new market opportunities or business fields faster. This is enabled by intuitive configuration options and reusing existing variability models stored in the PLM system.
Effectively limiting variant diversity: The interaction between maximum BOM (also known as 150% BOM) and sets of rules prevents the creation of uneconomical variants. Through a PLM system with integrated variant management, the portfolio can be managed in a clear and structured way.
Support for product, quality, and compliance management: Thanks to automatically recorded comprehensive documentation, design decisions can be accurately traced back even years later. This makes it easier to meet compliance requirements with clients and authorities.
Procurement, materials management, and logistics: Frequently used components are stocked in various material alternatives and in larger quantities, reducing procurement costs. This enables companies to increase cost-effectiveness, shorten delivery times, and increase customer satisfaction.
Conclusion: A PLM system benefits the entire company!
PLM systems ensure end-to-end data availability along the digital thread. They enhance collaboration within product development and across departments, all the way to supplier chains. A PLM system as a central database (in the sense of a “Single Source of Truth”) with modern IT-supported collaboration tools significantly shortens time to market, reduces efforts in the quotation process, and simplifies compliance with customer and regulatory requirements.
Companies looking to manage the complexity of their product portfolio with a PLM system do not necessarily have to put up with high administrative efforts. Cloud-based Software-as-a-Service (SaaS) solutions provide preconfigured and standardized function modules out of the box. A user-friendly no-code environment allows the specialized departments to set up the software themselves without requiring any specialized IT knowledge. Furthermore, companies relieve their IT department from efforts that traditionally come with installing and maintaining dedicated hardware infrastructure. Updates and backups are performed automatically, eliminating the need for manual interactions. Extensive cloud security technologies provide reliable protection against cyberattacks and prevent unauthorized access to sensitive data.
Benefits of SaaS PLM at a glance:
- Building and managing complex product portfolios
- Systematic product cost management during development
- Comprehensive requirements management throughout the product lifecycle
- Rule-based variant management
- Implementation of methods to support effective interdisciplinary collaboration in complex projects
- Fast response times
- Reduced workload for internal IT department (in times when IT specialists are scarce)
- High availability and IT security
Take advantage of cloud-based PLM software now: CIM Database Cloud is the solution for end-to-end digital product development. With “Innovate”, you bring innovations to market faster and manage your product portfolio with ease.
