History of Product Lifecycle Management

Dr M Manjuanth Shettigar
Professor of Economics & Management
Christ University, Bangalore - 34
To understand how and why product lifecycle management first developed and why there is a
clear and growing need for PLM, we first need to look at what we mean by product lifecycle.

The Concept of Product Lifecycle

In 1931 Otto Kleppner developed a precursor to what we now understand as the basic product
lifecycle where he suggested that products go through three stages:

Pioneering

Competitive

Retentive

The next reference was from a man called Jones who worked for Booz, Allen and Hamilton, and
in 1957 he theorized that there was a lifecycle that is characteristic of most products and he put
forward this terminology:

Introduction

Growth

Maturity

Saturation

Decline

In 1959 Patton wrote that there was consensus that the key element of the product lifecycle was
that profits are high during the growth phase and decline due to competition during the maturity
phase.

How did these definitions of product lifecycle evolve to our

current understanding?

As early as 1985 there was clear understanding that:

The price of new products should be as high as possible.

In the transition from maturity to saturation, competition between different manufacturers

would reduce prices.

Towards the end of a product's life, the market and not the manufacturer would set its
price.

The currently accepted terms for product lifecycle today are:

o
o
o
o

Introduction
Growth
Maturity
Decline

So where does Product Life Cycle Management fit into this

PLM developed as a manufacturing tool for businesses seeking to maximise the advantage of
bringing new products to the market first.
During the introduction stage of a product's lifecycle (PLC) there is very little competition, but
developmental costs are high. Once the growth stage is reached, product volumes increase
exponentially and it is at this stage that adroit manufacturers reap the major portion of their
profits.
PLM aims to facilitate the process by allowing manufacturers to:

Shorten the time from concept to sales.

Reduce development costs.

Ramp up production volumes to meet demand.

Manage and improve on product quality and cost.

Reduce manufacturing costs as product moves from growth to maturity and into decline.

One of the first recorded applications of PLM was in 1985 by American Motors Corporation who
were looking for a way to speed up the product development process of the Jeep Grand
Cherokee.

The first step was the using CAD tools with the primary objective of increasing the productivity
level of the draughtsmen. Accuracy and consistency was enhanced because drawings and
documents were stored in a central repository in their database. This in turn facilitated the
engineering change process with easy access to correct documentation, allowing quick and
effective resolution of design errors.
This novel approach was so effective that when Chrysler purchased American Motors in 1987
they retained it, and this helped to make them the lowest cost American manufacturer in the next
decade.

Today the modern world of PLM

PLM is now the term is now used to represent the integrated set of software tools used in the
design, review, and manufacture of products and product lines from initial conception,
development, manufacture, distribution, to end of life.
As with the American Motors initiative, an effective PLM system is fully integrated using the
same data and information for all transactions, and thus ensuring data integrity and the
minimisation of errors.