PLM Trends in Pull Economy

It will be an understatement to say that economy trends certainly can influence everything in our life. One of the major trends that I’m observing is to move from “push” economy to the “pull” economy. Push economy is geared up to be mass-production. In the push economy, there is more demand than supply. The life of manufacturers was different. In the “pull”  economy, the supply is much bigger than demand. With the introduction of new country economies the situation moved to the “pull” state. This is the situation when a “customer” is the king on the road.

In my view, “pull economy” has a significant influence on Product Lifecycle Management and role PLM for manufacturers. If I’m looking back in the “push” past, mass production was the most important element of manufacturing. Combined with “segmentation”, mass production was the way for manufacturing to achieve efficiency. From product development, life was much easy- you define a product, push it to the manufacture, optimize it for mass production and… done deal. That time manufacturers were a little to do with a product. As opposite, it was a huge deal of mass production organization, and it was reflected in development of MRP and later ERP products.

Market Fragmentation
When the economy moves from push to pull, you cannot just segment market. Something different comes to the place – fragmentation. Your role as a manufacturer to identify this fragmentation and adjust. It means, your product development needs to have an ability to be adjusted to the fragmented customer niches.

Smaller Customer Groups
Due to fragmentation, there are much more different customers and as result similarity happens in smaller groups of customers. So, your manufactures cannot be geared towards mass production, but need to be more adjustable and agile.

Tailored Products
Another interesting trend is towards product customization. It was always a case in premium brands and product lines. However, nowadays it becomes acceptable on the much broad range of product and customer segments. To have an ability to tailor your product design and manufacturing is not a simple task.

Shorter Production Runs
Another interesting effect is the high speed of change. Known before only in seasoned products like fashion, it comes today everywhere. To get market competitiveness, manufacturers push new products, features, models to the market. It resulted in the high speed of change in product development and manufacturing. An ability to product fast and replace old products with new ones becomes imperative.

With such important changes in the economical situation, what should be the answer of PLM software and services providers? Ultimate, to support product development in this environment becomes very complex tasks. I’d like to figure out three major aspects related to PLM software development that in my view can support manufacturer’s competitiveness

1. Flexible Data Management
High level customization resulted in various needs to create and support different information models. Multiple new elements of data need to come into play to reflect all changes. To support it, PLM needs to take the next step in data management agility. The needs of customers will become so unique, that will make impossible to support it as a predefined configurable set. Various adaptive data management schema requirements come to my mind. I can imagine the next level of intelligence in product modeling and data surrounded it.

2. Low Adaptation Cost
Fast changes. These are very simple requirements. However, this is one of the most problematic aspects of PLM software (and enterprise software in general). And we need to find a way to resolve. Cost of change in PLM systems is too high today. Most of the companies cannot afford it. How to make it happen? The same adaptive data modeling needs to come into play.

3. Efficient Communication
Information streams. We live in the internet age. The speed of communication in the Internet is much faster than in enterprise manufacturing companies. Communication is the ultimate way to react in changing world. PLM needs to adopt new ways to communication – social, mobile, online. All these keywords need to come into play and improve today’s situation.

I believe, there are multiple ways to support manufacturers in the “pull” economical situation. The change comes not only in PLM, but in other different aspects related to product development and manufacturing. I’d be interested to discuss it with you.

Just my thoughts…
Best, Oleg



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