I wonder at times why so many companies hide their best and brightest minds, products and departments in some dark corners while endlessly and tirelessly parading once popular but steadily fading divisions before a tired crowd. That’s the case with the electronics industry where the already obvious – microprocessor, smartphone, PCs, digital TV, etc. – get the industry’s full attention even as segments like automotive, aviation, medical, industrial have long been considered niche markets.
Yet, these not-so-sexy and somewhat neglected industry segments often make up quite nicely for what they lack – volume – with what they have in abundance – healthy margins. This has become quite obvious during this earning seasons. We’ve had endless coverage of Apple Inc.’s results with many playing up its huge sales while ignoring the fact “gross margin was 36.9 percent compared to 42.8 percent in the year-ago quarter,” as the company reported July 23. That’s a drop of 5.9 percentage point!
That brings me to the subject of product lifecycle management (PLM), the process that daily orchestrates a miracle in the electronics manufacturing industry. PLM, in fact, holds the industry together by bringing together varied creative and production activities to get products to market at the right time, reasonably priced and efficiently more than 90 percent of the time.
If you are a player in any of the different industry sectors, you undoubtedly contribute to product lifecycle management. And that includes enterprises that operate in what one might consider the periphery of the manufacturing process such as logistics and transportation services, warranty fulfillment companies, call centers, finance (somebody’s got to watch the flow of money in and out), legal and IP providers.
Notice that I haven’t even touched upon core product design, development and manufacturing divisions. The design team is, of course, critical in product development but once they are done with the concept and have passed it on to manufacturing other divisions zoom in to ensure smooth delivery to the cust6ocustomer. The components engineer is at the heart of this process, working closely with procurement/purchasing and manufacturing to ensure cost-effective and in-time delivery of components to contract manufacturers or in-house production team.
PLM goes way beyond this though, as my colleague Barbara Jorgensen observed in a recent article. (See: My Pool Pump Broke: What’s the Connection with Electronics?). PLM is an entire process that stretches from the product conception stage all the way through design, prototyping, production, service and warranty to the eventual end-of-life disposal.
In other words, PLM is about planning for all stages of life, anticipating potential crises (and, if they do occur, being there with solutions and alternatives) building flexibility into short and long-term plans and constantly staying alert to take advantage of opportunities and avoid or reduce the impact of disasters. PLM is at the heart of all human economic activities, both manufacturing and services.
It’s a critical tool for the electronics industry but it’s often an after-thought or at best a tolerated distraction on the march towards another market-winning product. Except, PLM is what delivers the winning punch.
There are many companies offering PLM services to the electronics industry but they seem too timid to proclaim and market their services. Household names that offer PLM software include IBM, Oracle, SAP and Siemens but there are many more that help manufacturers manage the lifecycle process. Contract manufacturers and component distributors serving the electronics industry augment their services with lifecycle management offerings too.
That’s all good but what the industry really needs is a PLM champion or many PLM champions; companies that proudly acknowledge how critical effective planning can be to winning in the market place.