Executive Briefings

Product Lifecycle Management: The Increasing Dynamic Between Product Design and Strategic Sourcing

Analyst Insight: Product and engineering design focuses more on the technical feasibility of a product, and strategic sourcing works more on the commercial feasibility of materials of the same product. The two together are what product development is about. Product lifecycle management (PLM) comprises the management approach and the technology used to increase the dynamic between the two feasibilities.

TEC has found that business users selecting PLM solutions currently have higher expectations in terms of achieving more interaction between design and sourcing processes.

This trend represents the growing importance of the bidirectional interactions that take place between design and sourcing. On one hand, efficient sourcing activities rely on accurate and synchronized product definition information that facilitates communication, internally and externally. Sourcing employees and suppliers both need to have a concurrent view of product definition information as designs evolve.

On the other hand, designers need input from sourcing and procurement processes to optimize their design work. The earlier that sourcing employees' and suppliers' knowledge can be captured and routed to designers, the easier it is to make better product design decisions.

In fact, the technical feasibility and commercial feasibility of a product are the two tightly twisted plies of a strand of yarn--product design and sourcing are not sequential processes (sourcing following design), nor are they parallel processes (occurring independently). The reason PLM is capable of increasing the synergy between design and sourcing is not only that PLM manages the processes involved in generating product definition information but facilitates the distribution, consumption and exchange of product information and sourcing knowledge.

The Outlook

PLM provides a management framework that brings all product stakeholders closer during product development. However, due to the limitations of technology and IT infrastructure, traditional PLM systems lack a convenient way of capturing and distributing information throughout the entire extended enterprise environment. Cloud computing, Web 2.0, and better visibility and interoperability of product definition information will make PLM systems more capable of twisting the "two plies" more tightly together.

TEC has found that business users selecting PLM solutions currently have higher expectations in terms of achieving more interaction between design and sourcing processes.

This trend represents the growing importance of the bidirectional interactions that take place between design and sourcing. On one hand, efficient sourcing activities rely on accurate and synchronized product definition information that facilitates communication, internally and externally. Sourcing employees and suppliers both need to have a concurrent view of product definition information as designs evolve.

On the other hand, designers need input from sourcing and procurement processes to optimize their design work. The earlier that sourcing employees' and suppliers' knowledge can be captured and routed to designers, the easier it is to make better product design decisions.

In fact, the technical feasibility and commercial feasibility of a product are the two tightly twisted plies of a strand of yarn--product design and sourcing are not sequential processes (sourcing following design), nor are they parallel processes (occurring independently). The reason PLM is capable of increasing the synergy between design and sourcing is not only that PLM manages the processes involved in generating product definition information but facilitates the distribution, consumption and exchange of product information and sourcing knowledge.

The Outlook

PLM provides a management framework that brings all product stakeholders closer during product development. However, due to the limitations of technology and IT infrastructure, traditional PLM systems lack a convenient way of capturing and distributing information throughout the entire extended enterprise environment. Cloud computing, Web 2.0, and better visibility and interoperability of product definition information will make PLM systems more capable of twisting the "two plies" more tightly together.