PLM has significant impact on internal, supplier-facing and customer-facing operational efficiency. AMR/Gartner provides some helpful research that highlights specific examples of the operational efficiency payback.
PLM systematically enables better communication and decision making in product development and engineering aspects of the product lifecycle, resulting in improved efficiency in these operating areas by:
Although most companies have existing metrics for these areas, measurable improvement will show within the first six months of live usage of a PLM system. More importantly, these existing operating metrics are also linked to higher-level strategic imperatives, such as speed, innovation, quality, and cost efficiency.
Therefore, improvements in operational efficiency are most critical, giving top management the ability to monitor process against the project milestones (such as loading data, or going live) and against performance goals of accelerating product innovation.
The first set of operating benefits targeted with PLM initiatives is internal effectiveness. Paybacks in this area are among the easiest to prove with existing user best practices using ROI analysis.
Research done by AMR/Gartner displayed below shows specific examples of improvements in internal process efficiency.
Internal Operational Efficiencies:
The second targeted area for operational improvement is supplier-facing activities in product development and lifecycle management. This area offers the clearest cost reduction and the most promise for immediate ROI because it focuses on design for lower total cost, resulting in reduction in redundant parts and material specifications.
See examples provided by AMR/Gartner below:
The third area of operating improvement is customer-facing performance. Most business cases fail to isolate and concentrate on this area of payback, resulting in an often forgotten cost-reduction opportunity. Benefits that result from taking advantage of this area include higher customer satisfaction, higher win rates for custom designed products and components, and a positive impact on selling and service costs.
See some examples of these benefits below: