You will be redirected back to your article in seconds
Skip to main content

Why You’re Probably Underutilizing Your PLM System—And Leaving Money on the Table

Product lifecycle management solutions are streamlining the path from design concept to completed product through digitally driven tools that foster collaboration and enhance flexibility. But making the most out of these platforms hinges on engaging more of the supply chain and more departments within an organization.

The top benefit of a PLM system is visibility, linking data on everything from design to material availability into what Kelly Price, director of business development at PLM consulting company ArcherGrey, calls “one source of truth.” If companies act on the data effectively, this singular hub of information can unlock the ability to more speedily react to trends or handle processes such as inventory replenishment, digitizing manual operations and tracking tasks.

“[PLM] is totally a digital transformation, even though it’s a kind of scary word for the apparel industry, it can really make a difference in how customers work and how they are able to take control of their development process and making sure that they have the proper inventories in place for their retailers and their own stores,” said Nicholas Jouriles, director of digital transformation solutions at web-based software firm DeSL.

Traditionally, PLM solutions were more focused on the product development process, but there is now an opportunity to better integrate data from other parts of the supply chain to make more educated decisions and better deliver on demand.

For instance, companies can feed crowdsourced consumer feedback or input from store managers into the PLM to use predictive analytics to inform design and better align merchandise with what shoppers actually want. Information from point of sale systems can also be fed back into design, enabling companies to capitalize on popular styles by expanding size availability or colorways.

Related Stories

“It really [is] getting to the root of the details, whereas in the past you were kind of throwing a dart at a board and hoping you hit something,” Price said.

These technologies work best when all the parties that are involved in product development are collaborating in a single system. Nikki Baird, vice president of retail innovation at retail technology solutions company Aptos, noted that a lot of companies isolate PLM, keeping the technology strictly centered on the design team when it should be more integrated with financial and assortment planning.

“This gives much richer information about the potential success of a design much earlier in the process, which can drive all kinds of value down the road, through capacity reserves and planning, raw material procurement and the allocation of items to stores,” Baird said.

As more design processes are digitized, such as through the use of 3D tools, PLMs allow vendors and companies to collaborate remotely rather than sending samples around the globe, thereby saving time, money and waste. With various time differences, Price noted that without a centralized data platform to consult, companies might be waiting on vendor replies for 24 hours.

Jouriles has also seen this digital development expanding the types of data that firms enter about fabrics, such as weight and volume, as designers need to know how a particular textile will drape without the benefit of manipulating the physical material. Suppliers can also make notes about fabrics, such as whether a particular textile slows production because it is more difficult to cut.

From a purchasing perspective, PLMs enable companies to see what materials are being used across categories, unlocking better negotiating and buying power and potentially streamlining the number of suppliers, according to Price.

With consumers increasingly focused on how their products are made, creating a vendor portal can further enable companies to have better visibility throughout their supply chain. Firms can establish testing parameters that determine whether they continue working with particular suppliers based on their labor conditions, Jouriles said.

Another opportunity is feeding PLM information, such as details about fit or fabric, to partner retailers through third-party APIs. For instance, this fit data could be used to identify which size a consumer would be in a particular garment or serve up suggestions of brands with similar sizes.

“The big key that has changed is that PLMs are opening APIs to these other solutions, so that way they’re sharing information and they’re having better integration with ERP systems and POS systems, and that’s what is allowing the PLM system to store this information and then share it, not only with their suppliers and internally but also with e-commerce and other stores,” Jouriles said.

PLM solutions can help retailers balance delivering on demand with preventing overproduction by enabling visibility into their inventory across all stages of production. This helps brands more accurately communicate to consumers when an item is out of stock, and when it will be replenished. With buy online, pick up in store becoming more popular, this enables retailers to better deliver on promises.

“An easy answer to never disappointing customers would be to just overbuy and deal with whatever is left over at the end of the season, but no one has the margins to afford that kind of strategy, even increasingly luxury companies,” Baird said. “Throw in consumer concerns over the sustainability of the products they’re buying, and it ties brands’ hands even more. Making sure you can meet customer needs while not burning up all of your margins is a very important piece of the puzzle.”

Compared to products such as enterprise resource planning that is led by IT, Jouriles noted that PLM decisions should actually be directed by the creative teams as the use of these systems is more “emotional.” Given the wide range of individuals who will be interacting with a PLM, from suppliers and vendors to in-house teams, these end users should be consulted about the system to ensure that their problems are solved.

Even companies that have a PLM solution in place have an opportunity to better maximize how they are using the tool to get the most out of it. For instance, there may be features that have valuable cost- or time-saving benefits that are being left on the table, such as the potential to save millions via virtual sampling and the creation of a material library. Many PLM solutions are configurable, enabling users to track the parameters that they want to follow.

But some companies fail to properly leverage the data housed within their PLM, since collecting information means nothing without a way for decision makers to effectively consume the insights.

“It’s always good to crawl, walk, run,” Price said. “But what happens a lot of times is [companies] crawl and never walk, or they walk and never run. And even if you’re running, you probably need to start walking again, because you’re never really done.

“When you think about PLM, it’s definitely a journey, it’s a program that will honestly never go away, because you should always be enhancing your system, as well as the software vendors should be,” Price added.