PLM boosts buyers' product development role
From helping to control costs early in a project to ensuring suppliers know of product-design changes, PLM is helping purchasing make product development profitable as well as innovative.
By Paul E. Teague -- Purchasing, 3/2/2006 2:00:00 AM
Click here to view a PDF of the general flow in new product development (as seen the print version of the magazine).
In the team sport of product development, purchasing professionals are morphing from bench warmers to first-string players, thanks to a heightened awareness of the important role they play in controlling costs and managing suppliers. And among the equipment some are carrying onto the playing field: product lifecycle management (PLM) software.
"PLM is giving purchasing a say in the early costs of product development—the design phase, where 80% of the cost is," says Rimi Bewtra, who manages Oracle's PLM product suite.
Gaining that early involvement in product development has been the goal of purchasing professionals since their ancestors helped the first group of cavemen develop and distribute the first wheel. And when they get the call, they show the way to savings, say practitioners and consultants alike. In a recent study, the Aberdeen Group found that companies that involve suppliers and procurement groups at the design-concept phase cut costs by nearly 18% compared to companies delaying that collaboration. The study also revealed that early involvement provides 10-20% improvements in time-to-market cycles.
Beyond cost control, PLM is also helping some purchasing departments implement or improve strategic sourcing. Dave Schmid, associate director of purchases at Proctor and Gamble, is hoping to use UGS' Teamcenter lifecycle management software to turn strategic sourcing into a competitive advantage. "P&G procurement professionals will be able to make faster and more efficient sourcing decisions by quickly finding and reusing data created in other systems," he asserts. He adds that by automating routine tasks and providing self-service support for suppliers, P&G will be better able to focus on strategic sourcing decisions.
Among other PLM benefits, says John Kuta, director of product management for PTC: PLM helps buyers know that BOMs (bills of materials) are accurate.
Adds Jonathan Gables of MatrixOne: PLM leads to a tighter integration between engineering and purchasing.
And that holds true even in the original-concept phase, says Gayle Sherwood of Agile Software Corporation. That's where purchasing and engineering identify parts, discuss how to eventually build the product and build a preliminary BOM.
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