Just How Important is Product Lifecycle Management (PLM)?

Author: Julie Abraham

It’s critical.  You need to “purposefully” manage a new product from cradle to grave.  This is all part of product management.  It’s essential to any organization in managing the P&L and driving profitable growth.  This roadmap needs to be part of your product management strategy.

So how do you lead and manage for success?  Once you have a roadmap in place, you need to measure the success of your products.  You need to track how they are doing versus your targets on your key metrics like revenue, volume, turns, facings, distribution metrics, cost of goods sold (COGS) and profit.  These are just the symptoms – you need to understand the root cause.  If you’re not reaching the proposed targets you need to recognize why so you can take corrective action, sooner rather than later.  You need to know if a competitor has launched a similar product or if you’re not delivering on your promise to the consumer or if the product is no longer relevant or if there is a consumer issue with usage.  The root cause of these symptoms can be traced across the entire new product process or even outside of your process.  It can start in your Portfolio Management process with an ineffective management of ideas.  Or it can be due to lack of visibility to competitive activity when you are within weeks of launch.  This is precisely why measuring results, understanding the root cause and taking appropriate action is critical. 

Action might be required immediately after execution and launch into the marketplace or it might be 12 to 24 months down the road.  You simply might need to “refresh” the product by making minor tweaks and changing the advertising message (i.e., new and improved).  It might be that you’ve launched too many varieties and you’ve diluted the brand or the product range and so turns, facings or distribution has diminished.  If this is the case, you might need SKU or item rationalization to increase volume per item and improve profitability.

It is important that you have measures in place and a process to track and analyze your product line metrics.  Keep an eye on the entire portfolio and manage it carefully.  This will help you drive results and stay in front of the competition.  Organizations that are good at this have a good process in place to intentionally manage this.  Sure, you can fix issues with new products after the fact, in which case you have a reactive strategy.  But then you’ve lost valuable time, revenue, profit, and your resources are not working efficiently.  Additionally, issues can deteriorate your brand position and value.  World class organizations have a proactive approach.  Planning your “refresh” or your product launch for it’s next life stage will help you develop a proactive approach with the evolution of the product line in mind.  In doing so, you can cut your development time because the concept and potentially development is already in play.  Your resources will be used much more efficiently and you have a higher probability to reach your growth and profit targets.

Competitive intelligence will play a big role here.  As you see competitive products stealing volume, you need to act quickly.  Depending on how well the product is solving a problem and delivering unique and relevant value to your consumer, competitive barriers to entry will help with this.  But over time, they will find a way to deliver a “me too” product or probably something even better.  So the more you plan for this and solve new consumer problems, the more probable you will consistently deliver unique products and drive profitable results.

Another area to watch closely is customer service and consumer affairs.  You need to track customer (meaning retailers) and consumer complaints to ensure you are delivering on your promise or your intended product performance.  For example, you might see a spike in consumer complaints regarding aroma.  In which case you may want to make product recipe adjustments to improve the aroma immediately.  Again, acting quickly will be important.

Are you managing your entire product lifecycle purposefully?  Is the product roadmap part of your strategy?  Share with us your thoughts or questions. 

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