A Guide to the Benefits of PLM Software

4 years ago

For companies and manufacturers that need to design, source, produce and distribute products around the world, having single source to manage all the data and processes is essential. Having a PLM system is the way to achieve this; PLM has become important as the single source of truth for managing all aspects of the product from initial development right through to product retirement. But, just implementing PLM is not in itself a business benefit. So, what are the advantages of having a PLM system?

Benefits of PLM Software

Gather and connect data throughout the lifecycle

In an integrated PLM system designed to handle data and product management from conception to retirement, data from any source can be linked and joined in real time. This enables a comprehensive and single source of data and information to be maintained as a platform for creating the product lifecycle. A PLM system provides this single platform by not being fixed in its data structure. It can also consistently link data throughout the development process. For example, a change in a part in one stage of development would flow through to all the related data; in effect, information is linked from the beginning through to the end of the product lifecycle.

Cross-functional collaboration and efficient communication

PLM software should seamlessly integrate with other systems. For example, a company should have access to the data that is contained in its ERP system and other existing databases. By linking information together and breaking down silos, PLM improves cross-functional collaboration and efficiency in communication. For example, Engineering data can be combined with manufacturing information, increasing overall work efficiency. This is particularly relevant in the early product development stage where there will be much collaboration and coordination with different departments.

Better quality, more streamlined production and more efficient production

A PLM system can improve quality by providing centralised access to data and reducing the time-to-market of a new product after a change is made. Implementing a PLM system can reduce the number of iterations in the design process, this being particularly useful when designing complex products.

Through having a single source of data available to all members of a development team, it can be made easier for different functions to collaborate and make changes that are accepted throughout the different departments. Production processes can be streamlined by standardising and improving the process flow. Detailed product information and notes can be embedded into the manufacturing process to ensure timing and process templates are adhered to.

Improved forecast accuracy, reduced inventory and less stock outages

A faster product cycle is more beneficial for a company financially and in terms of its market position. As the stages in the design and development loop are reduced, the impact on inventory is reduced and inventory can be reduced accordingly. Better forecasting from centralised data will also reduce the need to over-manufacture in order to meet normal forecast accuracy standards.

A complete, linked data system will provide a clearer picture as to where stock is located and in what quantities. This information can then be used to reduce stock outages and provide justification for ordering more stock as required.

More effective management of the supply chain

A single source product database will improve the management of the supply chain significantly. The PLM system will automatically source the correct components for a product in development and will evaluate component substitution based on the criticality of specific components. This will improve lead times and ensure products remain on target. An integrated PLM system will also allow companies to track how components move through the distribution process.

For efficient management of the supply chain a PLM system should be compatible with other logistics and supply chain management systems. Depending on the nature of the business, this could be as basic as taking orders from a website and being advised of delivery dates, or it could be at a much more complex level.

Reduced development times, improved product quality, higher customer satisfaction and lower product risks

From a customer perspective, all of this translates into reduced development times for products, improvements in product quality and increased customer satisfaction. In addition, there are significant cost savings that result from lower risk associated with product development. This is critical to the long-term success of a company and marks the difference between small, localised and competitive companies and those companies that are global, full-service providers with a centralised PLM system.

These benefits should help you make a decision about whether PLM software is right for your business. Some businesses are set up as single businesses or smaller units within large companies. In these cases, a separate PLM system may not be the best option. Breaking information out into smaller, more closely regulated databases in these cases can have an equally beneficial effect. By making a careful selection of which information is shared and which is managed separately it is possible to gain many of the same benefits that are provided by a single PLM database.

There is no doubt, that investing in the correct PLM system can deliver substantial benefits to a business. But, the choice of the system is very important. It is vital to choose a system that will be easy to use and operate. Ideally it should be embraced by the company and it should become an integral part of the business planning and decision-making process. In addition, the system should be compatible with other business applications to deliver processes and functions that are ‘fit for purpose’. Through understanding the system’s impact and limitations, there are opportunities for embedding process improvement and innovation into the business processes of an organisation.

PLM systems are highly specialised and they deliver benefits that are specific to a specific industry. They are expensive to buy and have high running costs. As a business leader or a manager, it would be easy to be seduced by the cost savings that a single PLM database promises. However, if you are not careful you are likely to be disappointed. The incorrect system can end up costing more in the long term through higher overheads and lower product performance.

To make sure your business gets the right PLM system, it is very important that you choose the right software provider. Not all software vendors have the know-how to help you deploy a PLM system that delivers feasible, affordable, reliable and acceptable results.

Many software vendors are no longer in a position to help business-inspired customers deliver a business-driven PLM system. They are often unable to provide technical advice on how to use, integrate or adapt their products for a specific industry. The investment of resources in training, education and support to organisations is also frequently lacking.

You should be sure to find a software vendor that has real depth of industry knowledge. This will maximise the value you will get from your PLM system. To really make sure you are getting value from your investment, you should hire an integration provider that has the necessary skill set. An integrator can provide the technical and contextual knowledge required to deploy the most appropriate software system for your business. It will help you cut unnecessary costs and can speed up time to market.


In the last section, we discussed how PLM can allow you to link your business strategy to your manufacturing and engineering operations with the goal of improving them. It is, however, important to keep in mind that this link can be made irrespective of the selection of a PLM system. I also discussed some of the key financial and business benefits that are delivered by a PLM system. I also suggested that not all PLM solutions are suited to all businesses. Some PLM solutions are too complex, too expensive or do not deliver the right features. It is vitally important that the PLM solution is the right solution for your business. In the next section we will be looking at the process of setting up a PLM system from the perspective of the project manager responsible for the implementation.

PLM Implementation

Setting up the right PLM system and implementing it in to an organisation is an exercise that needs to be well managed. The interdependencies between the various tasks involved in the implementation is a challenge. This section explores the PLM implementation process. It provides advice on how to manage the implementation, how to integrate it into the business and how to avoid some of the common pitfalls involved in this process.

Developing and agreeing a business case

The first of the key tasks is to develop a business case for implementing a PLM system and to have that business case approved by senior management. This point is often overlooked because there is often an assumption that senior management will automatically accept the need for a PLM system. The reality is likely to be very different. Whilst senior management will understand the need for enterprise-wide information management, they will also question whether it is necessary to embark on such a large IT investment and such a complex implementation project. They will question the proposed return on investment. They will also want to see clear evidence of the need for improved efficiencies and reduced costs. This is when a solid business case for PLM is important.

The information contained in a business case should clearly explain the background of the proposed investment, how it will lead to improvements in the business and what it will cost. The business case should support the cost of implementing the system with the cost of carrying out the business process improvements that it is expected to deliver. The cost of implementing the PLM system should be clearly explained, with the costs factored in from the design phase right through to the business processes and improvements. It should also include any costs incurred for major system defect rectification and change.

Ensuring clear requirements

The next step is to ensure that the system requirements are clear. The system requirements should be driven by the business requirements. There should be clear distinction between what the system will do and what the organisation will do. If the requirements are too technology-focused it is likely to be difficult for the business to define what they will do with their PLM system.

The PLM system requirements should provide the information on how the system will deliver the requirements. These requirements may require the system to capture and report on some data. Or they may simply require the system to provide a set of reports. You should ensure that, as a project manager, the system requirements form the basis of the project plan. Their importance in developing the project plan cannot be over emphasised.

Key actions

  1. Understand and agree the business case that justifies the need for a PLM system.
  2. Ensure that the system requirements are clear and that they form the basis of the project plan.
  3. Identify and record all of the high risk areas of the project.

Ensuring the right project scope and scope creep

When you are establishing the project scope, you must decide the deliverables that your system will need to achieve. You need to ensure that these deliverables form the basis of a project plan. Scope creep is often the biggest single risk that a project will encounter. It is often caused by the desire of the business to have additional features or to have a new feature introduced to the system. When you are defining the project scope, you must ensure that the scope is comprehensive and covers all of the business requirements.

You must also ensure that the project scope is realistic when considering the project and the budget. Make sure you avoid setting the project up to fail because you have tried to do too much with the project. The project scope needs to be flexible enough to allow scope changes hence the requirement for a project plan.

Identifying and recording high risk areas

It is important to identify and record the high risk areas of the project. This will help you manage these risks. The high risk areas can be found at a number of different levels. Identifying the high risk areas will help you manage their impacts on the implementation of the PLM system. This is important because, not all of the risks will be manageable by the project manager. Some of the risks may impact the project as a whole.


Communication is an important aspect of a successful PLM implementation. The communication needs to be effective and targeted to the right audience. The message must be consistent and ensure that all of the parties understand the purpose and importance of the project. It may also be important to address any concerns about the project since this will frequently be a concern.

Good communication with the business is particularly critical to the successful implementation of a PLM system. The business will require to understand what the project is about, why it is important to the business and how it will benefit the business. Requiring the business to communicate with the project team is important since it is important for the project team to understand the business challenges. This information is important when the project manager is developing the project plan and identifying the risk areas in the project. Having the project team in contact with business people from the beginning is also important for the long-term success of well-being the PLM system.

Communication with the project team is also important. Having regular meetings with key members of the project team up-dates them about the project and ensures that they understand their roles and responsibilities. It is also important to communicate the project progress to the project sponsor. All of the stakeholders need regular updates on the project so that they can make informed decisions.

In addition to the communication with the project team, communication with the suppliers is also important. The supplier needs to know the detailed requirements of the project including timings and the risks involved. The supplier will also be aware of the availability of resources to complete the project on time.

Risk identification and management

Communication is also important when you are managing the risks attached to the project. When you are communicating with the project team, you can give them a clear and consistent understanding of the risks and how they can be managed. Managing the risks of the project will help you avoid surprises and ensure that the project is delivered on time. There are a number of different risk areas that can affect a PLM implementation project.

Technology risks involve the risks attached to the software used within a PLM system.

Business process risks are related to the risks attached to the business process changes required to support the implementation of the PLM system.

Time risks are often related to the time involved in delivering the new PLM system.

Cost risks are related to the cost of delivering PLM systems.

Staffing risks are related to the risks attached to staff on the project team. This is particularly important when the project is related to a large staff change since the change to the business will be traumatic e.g. a large number of jobs may be lost.

Political risks are related to the risks involved in managing the project towards the final solution. This can be especially important when a major part of the business may disappear from the organisation.

Procurement risks are related to the communication and business processes involved in securing the services of a supplier.

Creating the project plan

The project plan will help you to manage and track the progress of the project. It will also help you track the project costs. Good project planning will help you to make decisions on how to mitigate risks. It will also help you to identify the challenges of the project. The project plan will focus on the day-to-day work required of the project team.

As a project manager, you need to plan when to communicate with the project team and with the business on the project. Similarly, you need to plan when to communicate with project stakeholders including the project sponsor. The project schedule should be based on the project plan. Scheduling the project activities will help you to monitor the progress of the project. Th regular communication is essential for key milestones in the project.

Consider what should be included within the project plan. The project plan should include details of the high risk areas. This will help you to plan for and manage these risks. The project plan should also include key dates and communication points. It is important to have detailed records of all of the communications to ensure that the details will be available when necessary.

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