What is product lifecycle management (PLM)?

It integrates people, data, processes and business systems to create an information backbone for companies, their product portfolios and their sprawling IT ecosystems.

PLM tools provide centralized repositories for all of a company’s product data, enabling seamless collaboration across teams and timely course correction when market demands shift or technologies evolve. These tools also streamline production and innovation practices, so companies can create better products faster.

PLM tools are essential for ensuring that products are manufactured and delivered efficiently and that companies can remain profitable even as conditions change.

PLM methodologies have existed since the advent of digital products. However, modern PLM started in the 1960s with early product development solutions and computer-aided design (CAD)  software systems, which helped businesses create 2D models—and now virtual 3D models—before building physical products. These tools were helpful, but computers at the time weren’t equipped to store, distribute or locate massive CAD files.

To address the capability gaps, engineers developed product data management (PDM)—also called PLM 1.0—which was still CAD-driven but could handle larger file sizes¹. PDM 1.0 also incorporated bills of materials (BOMs)¹ . These provide a comprehensive list of every component and raw material required to build and maintain a product. It also included engineering change processes, which included the change requests (ECRs) and orders (ECOs) used to modify a product’s design.

However, these tools couldn’t keep pace with the exigencies of outsourcing and globalization. In the 1990s, engineers expanded the PLM software to include a security layer and intrabusiness collaboration features. Unlike PLM 1.0, which focused almost exclusively on the product development process, PLM 2.0 incorporated a range of functions. These included manufacturing, quality planning and product compliance to help businesses manage products end to end, from ideation to retirement.¹

The new millennium ushered in PLM 3.0, which focused on streamlining product launches and incorporating broader lifecycle capabilities (innovation and requirements management, for example). It helped businesses improve connections with downstream manufacturing, supply chain and commercialization processes, often integrating capabilities with legacy tools. Despite these advancements, PLM 3.0 was still challenging for IT teams to customize and implement.

Today’s PLM software, PLM 4.0, prioritizes supply chain optimization and customer ease-of-use. It uses the software as a service (SaaS) model to simplify scaling, minimize IT staff demand and keep pace with digital transformation initiatives.² It can, for instance, create and monitor digital threads, which integrate IoT data, digital twins, factories and customer insights across businesses. This helps break down data silos and simplify data collection.

Modern, cloud-based PLM tools enable integrated, bidirectional data access for all key stakeholders, so enterprises can focus on accelerating innovation and creating high-quality products for consumers.  

Product lifecycle management systems help businesses optimize the product lifecycle, which comprises 5 broad stages.

In the concept stage, teams generate new product ideas based on market research, customer needs and available technologies. Ideation processes typically include brainstorming sessions, market and competitive analyses and feasibility studies to assess the viability of new ideas.

This stage also includes risk-reward considerations, financial planning and filtering processes that push the most promising concepts to the next stage.

By using CAD and other design tools, development teams create detailed product designs that meet their aesthetic and functional needs and help optimize manufacturability. Development teams can use iterative prototyping processes to help teams continuously test and refine design concepts until the final prototype receives validation for full-scale production. The development stage also includes extensive reliability, safety and compliance testing to ensure that the product is ready for production.

Successful product designs become manufactured goods and services in the production and launch phases. Production teams implement process planning, tooling and resource allocation protocols to help ensure that the manufacturing process is efficient. Final products often undergo extra testing before and after launch to help businesses continuously improve product quality over time.

For example, a software provider can use PLM to distribute user surveys and find out the products’ net promoter score. This indicates how likely a customer is to recommend a service—to determine where modifications are necessary.

When the manufacturing and quality assurance processes are complete, marketing teams create sales plans and marketing campaigns to help ensure that the product launch meets—or exceeds—sales objectives.

In the service and support stages, the product receives frequent maintenance and updates to extend its lifespan. Businesses also gather and analyze customer feedback from various sources to inform future innovations and product improvements and to increase customer satisfaction.

If, for instance, a SaaS developer is considering a new feature rollout but wants to see how it performs before the full launch, they can run beta or A/B tests. These tests would be conducted with select groups of users first. The team then collects and analyzes customer feedback by using a PLM solution, which recommends changes and creates reports detailing how the new feature will affect the entire value chain.

At the end of a product’s lifecycle, businesses systematically phase out inventory and discontinue support so customers continue to have a smooth user experience. For many businesses, retirement also requires the disposal of physical product components, which ideally includes the use of recycling and repurposing programs to maximize sustainability and minimize environmental impact.

Leading PLM solutions comprise a range of features that help teams streamline and automate key business processes. They include:

PDM is the backbone of PLM, providing a comprehensive repository for all product-related information. PDM uses CAD files and specifications to keep all design data current, accurate and readily accessible for stakeholders. PDM also deploys version control systems to help businesses track each iteration of a product, enforce user-specific permissions and protect sensitive data from unauthorized access.

Process management capabilities within PLM tools enable seamless workflow automation, standardization and project management. Automation workflows help streamline repetitive processes, so tasks are completed accurately on time and with minimal human intervention. These tools minimize tedious manual data entry tasks, freeing team members to focus on strategy and innovation.

Project management tools help businesses simplify timelines, task lists, resource allocation and progress tracking so all stakeholders are aligned on project goals and product teams can easily collaborate across the business. With standardization capabilities, PLM tools can create and apply uniform procedures, templates and guidelines to multiple projects, keeping deliverables consistent and accessible throughout the enterprise.

Clear communication is vital to effective collaboration and teamwork across departments, especially for businesses whose operations span geographical regions.

PLM solutions offer real-time communication platforms that support instant messaging, video conferencing and document sharing, enabling seamless interaction between team members, regardless of physical location. These platforms help businesses build cross-functional teams, integrating the diverse expertise and perspectives of individual team members to improve existing products and identify new opportunities.

PLM tools also use cross-system integration to help businesses optimize and integrate workflows. For example, a PLM tool can connect an enterprise resource planning (ERP) system and a customer relationship management (CRM) system, so sales teams can track product inventory and pricing.

Change management functions help businesses keep track of all product design and development changes.

PLM tools simplify change management processes by establishing a structured process for proposing and approving changes. When an internal stakeholder requests a change to the product or the product plan, they must submit the request to a predefined workflow. There, the relevant stakeholders evaluate its necessity and impact. They then approve or deny the change.

Document management capabilities within PLM software also help businesses maintain audit trails (complete histories documenting who requested, approved and implemented a change and the rationale behind each change) for future reference.

PLM tools can handle document control and confirm compliance with a range of industry-specific safety standards, environmental regulations and quality certifications. They can also automatically integrate quality checks throughout the product lifecycle.

To improve risk management practices, businesses can configure PLM platforms to conduct risk assessments (failure mode and effects analyses [FMEAs] for example) and track supplier collaborations and performance. These capabilities enable businesses to detect defects early—even if they originate with a supplier—and limit the risk of product recalls.

PLM tools monitor lifecycle data, comparing it to established metrics to evaluate product success and identify areas for improvement. They also use historical data and predictive analytics to anticipate market shifts, helping businesses make better, more informed product decisions in the future. 

Produce lifecycle management yields several benefits, including:

• Increased efficiency. PLM tools create a single source of truth for product information, streamlining workflow automation and updating deployment. If a product requires an update, project managers can use PLM to propagate scheduling updates to multiple schedules. Design and development teams can use the PLM system to understand how to redesign the product, and production and manufacturing staff can adjust production to accommodate any change in demand.
  
  
• Improved collaboration. PLM enables teamwork across departments by providing a centralized platform that enables leaders and employees to share product information, insights, best practices and expertise. Such features help companies accelerate time-to-market and build more agile, resilient supply chains.
  
  
• Reduced costs. PLM software helps businesses reduce costs and maximize profits by optimizing resource usage and minimizing waste throughout the product lifecycle. PLM also helps teams detect potential issues early in the product lifecycle, preventing costly fixes that can exceed budgets and create production delays.  
  
  
• Enhanced innovation. PLM tools encourage creativity and new product development by providing a structured environment for ideation and innovation. They help teams explore new product ideas within the context of business needs and market dynamics, so companies can continue to strengthen their product portfolios over time.
  
  
• Better user interfaces and experiences. Modern PLM tools prioritize user-friendliness and help users navigate complex data and workflows with minimal training or expertise. They provide customizable dashboards, drag-and-drop functionality and real-time collaboration features. These features help promote a smooth user experience for customers at every level, and better user experiences help drive stakeholder buy-in.
  
  
• Better data security and cybersecurity. As PLM systems become more interconnected and data-driven, cybersecurity and data protection become more integral to maintaining business operations. Advanced PLM solutions incorporate robust security measures—including encryption, access controls and security audits—to protect sensitive and proprietary information and ensure compliance with data privacy regulations.

Like various business sectors and practices, emerging and newer technologies have had a profound impact on PLM. Tools such as artificial intelligence (AI), machine learning (ML) and cloud-based solutions have enabled businesses to transform products faster and navigate ever-changing business dynamics with greater ease.

AI- and ML-driven PLM solutions can, for example, improve predictive maintenance, quality control and decision-making. These technologies analyze vast amounts of data to identify patterns and trends that humans might miss, enabling business leaders to make smarter, faster decisions throughout the entire lifecycle. Furthermore, AI-driven systems can provide real-time insights and recommendations, helping teams refine products in every stage of the lifecycle, from inception to disposal.

Internet of Things (IoT) technologies are increasingly integrated with PLM systems. They provide real-time data from connected devices and products. IoT data analysis can help businesses understand how customers are using products in the real world, encouraging better product design and more responsive customer service.

Cloud-based PLM solutions are increasingly popular among product developers, as they offer greater flexibility, scalability and accessibility than traditional solutions. Cloud PLM reduces the need for on-premises infrastructure, reducing infrastructure implementation and maintenance costs. Cloud-based systems also enable seamless collaboration between teams, regardless of geographical location, and can quickly scale up or down as business needs change.

Modern PLM tools can help businesses create digital twins—virtual replicas of physical products—for real-time simulations, monitoring and design optimizations. Augmented reality (AR) and virtual reality (VR) technologies enable PLM tools to overlay digital information onto the physical world. Product development teams can create immersive simulated environments that are useful for virtual prototyping and for instances where staff members need assistance with assembly and maintenance tasks.

Sustainability-minded businesses are also looking to implement more environmentally friendly PLM practices. Sustainable PLM focuses on minimizing environmental impact by encouraging the use of green data centers and eco-friendly materials, integrating reuse and upcycling programs and reducing waste. Today’s PLM tools can track environmental impacts and optimize resource usage, so organizations can continue to meet their sustainability goals.